Austrian Business Leaders Lobbying Survey 2014

Transcription

1 Austrian Business Leaders Lobbying Survey 2014 Andreas Kovar, Wolfgang Hammerer, Bettina Fernsebner-Kokert November 2014 Contents Summary and conclusion... 2 Study and methodology... 3 Interpretation of results... 3 Kovar & Partners GmbH Wirtschaftsforum der Führungskräfte Dorotheergassse 7, 1010 Wien, Österreich Lothringerstraße 12, A-1030 Wien, Österreich T: , F: T: , F: office@publicaffairs.cc, office@wdf.at,

2 Summary and conclusion The results of the "Austrian Business Leaders Lobbying Survey 2014" exhibited that lobbying and public affairs management have arrived in Austria. On average, more than 60 percent of all companies practice public affairs, among big companies it s more than 80 percent. Almost all companies (nearly 97 percent) observe social and politico-economic developments. More than half indicated that lobbying is used for obtaining information and hence provides an important basis for decisions. Here, the larger the company, the greater the benefit to the company s success will be evaluated. Three out of four large companies entrust their own employees with the representation of interests. Great potential lies within the associations and federations: When it comes to lobbying, more than 40 percent of the surveyed managers rely on these organizations. The share of contracted lobbyists is expected to be close to a double-digit range. More than 20 percent stated hiring external consultants, but since public affairs consulting hadn t explicitly been asked for, communication or legal advice may have been included. The importance of public affairs is growing The aim of this study was to deliver the missing quantifications for lobbying and public affairs: The Austrian Business Leaders Lobbying Survey 2014, carried out by Kovar & Partners and the Wirtschaftsforum der Führungskräfte (WdF) surveyed directors, CEOs and managers from the1 st to 3 rd level. Lobbying and public affairs as a business function are already standard and will continue to gain in importance. The public affairs consultant market in Austria is still less developed and there are only a few specialized agencies. There is yet great potential to further develop these services. Equal opportunity in participation and quality management instead of lobbying hysteria In a pluralistic society, there is great interest in participation. The need for political decisions and complex interrelationships make lobbying important. Therefore in public debate, in legislation and in companies a new, realistic approach is necessary, because the current dealing with the representation and mediation of interests is not adequate. It is time to end the lobbying hysteria in public and media discussion. Corruption and lobbying is not the same. In the past lobbying had to serve as a designation for all kinds of covert payments and other crimes. Lobbying is far from taking place in a legal vacuum, but legislators may have to amend the framework of the registration requirement in the Lobbying Act - and the legislative process must be transparent and enable participation. For companies, this means that they need quality management and compliance management for public affairs and lobbying. Companies are becoming more and more political players. The survey results show that the engagement of civil society is growing. Therefore the study is to be regarded as a contribution to strengthen the cooperation between politics, economy and civil society in order to solve existing economic and social problems more effectively. 2

3 Survey and methodology What significance do lobbying and public affairs have for Austrian executives? Whom do companies entrust with the representation of their interests and in which form? In February 2014, Kovar & Partners and the Wirtschaftsforum der Führungskräfte (WdF) carried out a nationwide survey among WdF members. The aim was to deliver facts and figures about the importance of public affairs from a manager s perspective. In Austria, there was a lack of meaningful data about lobbying so far. Now the "Austrian Business Leaders Lobbying Survey 2014" provides these missing quantifications for the first time. Basis of survey Methodology: Nationwide online survey among members of the WdF Target group: Executives, CEOs, supervisory and management board members, managers 1 st to 3 rd level Sample: 2500 Return: 357 Return rate: 14% Structure Among the 357 respondents, 89 percent were male and 11 percent female. Only 7 percent were younger than 40 years, 32 percent were between 40 and 49 years of age. 36 percent were in the age-group, 25 percent were 60 years of age and above. With 40 percent, Vienna had the highest participation rate, followed by Styria (20 percent) and Lower Austria (10 Percent). Interpretation of results In Austria the significance of lobbying and public affairs for companies is often underestimated in public perception. In contrast, the survey shows that on average 62.2 percent of all companies practice public affairs they entrust their employees with the representation of their interests as well as associations and federations or public affairs agencies. Among large companies (more than 500 employees) it is 80.5 percent. Almost all companies (96.9 percent) monitor their political arena and observe developments in economic policy. The significance of public affairs for companies Since the mid-nineties public affairs has gained importance in Austria. At the interface between politics and economy an increasing demand for public affairs management has started to emerge. There are multiple factors for this development: In the 1990s many state-owned companies were privatized or outsourced (e.g. telecommunication, postal services, energy sector). Therefore these companies had to reshape their relationship with politics and public administration with the help of public affairs. 3

4 Globalization and the European Integration also evolved liberalized markets and increased competition. As a result public affairs management became increasingly important. Pluralism, a greater diversity of opinions and increasing participation reframed the environment for associations in Austria. New organizations were established and they provided financial resources to establish public affairs departments (i.e. energy and pharmaceutical sector, tourism, health care sector). Processes of concentration e.g. in trade, in pharmaceutical and food industry triggered the establishment of public affairs departments in large companies. At that time the internationalization of Austrian companies and managing boards started. Executive managers from abroad required public affairs to obtain information at the interface between politics and public administration. On the other hand they were already experienced in public affairs management, since in the United States and other European countries public affairs were already an established corporate function unlike in Middle Europe. Last but not least, social change increased the importance of public affairs. The seniority principle became less important and people weren`t as loyal to political parties as before. Younger managers and women in leading positions didn t have any old boys networks to rely on, therefore they practice professional public affairs management. The survey clearly shows that executives in Austria have recognized the importance of public affairs percent indicated that public affairs management is a key factor for their company s success percent indicated that lobbying is used for obtaining information and hence provides an important basis for decisions. Only 23.6 percent of the surveyed managers stated that public affairs is less important. Merely 12.7 percent (weighed average) stated that public affairs is insignificant for their companies. Depending on the size of the companies there are considerable differences: Whereas only 2.7 percent of the companies with more than 500 employees see public affairs as insignificant, among small companies (up to 50 employees) it is 12.7 percent. 4

5 The importance of representing the company s interests Number of Employees Is a Key Sucess Factor Delivers important Information Low Importance No Importance % 53.5% 23.6% 12.7% % 67.6% 24.3% 8.1% % 64.4% 24.7% 6.8% > % 68.9% 28.4% 2.7% Weighted Average 24.2% 53.7% 23.6% 12.7% Aims of public affairs management What are the motives and objectives of the representation of interests for companies? In the first place companies want to get into contact with stakeholders, to form strategic alliances and to obtain business information percent (weighed average) of the surveyed executives indicated that these are the main goals for their companies percent mentioned governmental and administrative relations as reasons. 44 percent search for project support. Any kind of change is accompanied by social demands and it is important to react appropriately. Whether this relates to investments in a business location, rationalizations, acquisitions, infrastructure projects or product launches the decision, whether a certain project will meet high acceptance or not, will be made even before the project starts. An active representation of interests serves as a preventative measure that is paving the way. Companies seem to recognize that. To obtain information is equally important for companies (47.8 percent). It correlates with the fact that almost all companies observe developments in economic policy (nearly 97 %) % of big companies with more than 500 employees stated that decisions by regulatory and supervisory authorities are part of their public affairs management. Whereas in Austria only some industries are subject to regulations (including the pharmaceutical industry, the electricity and gas market, the telecommunications and rail transport, postal and health care providers). When it comes to regulatory issues, an average 22 percent practice representation of interests. For 35.6 % (weighed average) it is important to participate part in the legislation process or in the introduction of standards. Big and medium-sized companies play a far more active role when it comes to legislation % of companies with more than 500 employees and 52.1% companies with up to 500 employees mentioned that as one of their objectives of public affairs. By contrast, only one third of small companies play an active role in the process of legislation, these companies rather entrust associations and federations with the representation of their interests. 5

6 The objectives of representing the company s interests Number of Employees Stakeholder Management Governmental Relations Project Support Business Information Legislation Regulatory Affairs % 62.6% 43.9% 47.7% 35.5% 21.9% % 69.4% 50.0% 44.4% 33.3% 27.8% % 61.6% 50.7% 56.2% 52.1% 28.8% > % 72.4% 46.1% 34.2% 60.5% 34.2% Weighted Average 65.9% 62.6% 44.0% 47.8% 35.6% 22.0% An astonishing finding is, when it comes to legislation a very high percentage of large companies 40 percent don t play an active role. Nevertheless it is essential for companies to represent their interests in areas such as taxes and duties, labour legislation, technical standards, environmental legislation or fundings. Without lobbying, companies leave the legislation process up to others or their opponents. This indicates that there is still great potential for public affairs management in Austria. There are multiple reasons why public affairs is still not as developed as in English-speaking countries or even in Switzerland. The companies are comparatively small scale 98 % have up to 50 employees and there are only few headquarters. Furthermore, in Austria the legislation process takes place almost behind closed doors, companies are involved at a very late stage. And there are also other reasons: Up to the 1990s many companies traditionally delegated the representation of their interests solely to associations and federations. Many of the Austrian top 100 companies have only started in recent years to establish public affairs departments or to entrust employees with the representation of their interests. Whom do companies entrust with the representation of their interests? It turns out that companies have a high level of trust in their employees when it comes to representing the interests of the company. Around two-thirds (71.2 percent) of large enterprises entrust employees with lobbying - in the weighted average 42.8 percent have their own public affairs staff. The reason why still nearly 30 percent of large companies have no employees for lobbying, is probably due to the fact that around the turn of the millennium domestic companies have begun to develop public affairs as a separate company function. It is likely that the companies that currently don t have their own public affairs staff, will follow suit in the coming years - in competition with contestants an important factor. However 49.8 percent continue to entrust their company`s interests with legal representation of interests, such as chambers. High potential in the area of lobbying lies, according to the poll, within federations and associations. Only a small part has already built up public affairs structures. Nearly 42 percent of the surveyed executives stated that they can perceive their company s interests in this way. But this also means that 60 percent of companies do not even consider these organizations as representation of interests. To change this, it will be necessary that clubs and associations 6

7 create the organizational and structural conditions. In addition, responsibilities need to be set up and staff detached for lobbying. External consultants are hired by 20.7 percent, although the survey didn`t ask explicitly for public affairs consultancy. 30 percent of the large companies, but also one-fifth of small businesses with up to 50 employees mandate external consultants. The surprisingly high percentage of small and medium-sized companies suggest as well as other forms of counseling, such as public relations, communications- or legal advice were stated. It is also possible that advisers are consulted who are only active in consulting but do not lobbying. A large number of consultants might only be active temporary or on an ad hoc basis - and do not register in the lobbying register, although the Austrian lobbying law is very strict in this point. Who is in charge of representing business interests? Number of Employees Public Affairs Officer or Unit Chamber of Commerce Business Associations Consultants % 49.7% 41.9% 20.6% % 47.4% 36.8% 26.3% % 65.7% 41.4% 21.4% > % 65.8% 37.0% 32.9% Weighted Average 42.8% 49.8% 41.9% 20.7% The advice through external public affairs agencies should probably lie - if all these factors are included - in the single digits, to a maximum nearly in the double digits. In Austria, the market for public affairs is still very young and there are relatively few specialized agencies - in other words, there is still great potential for further development. What managers pay attention to when it comes to the implementation of the companies interests It turns out that for leaders in companies, reputable and high-quality lobbying has a high priority percent report that they place value on high-quality consultation. For 85.4 percent compliance is important percent pay attention to the integrity of the employees, who are engaged in lobbying. For only three percent quality plays no role. Who practices successful lobbying? In the course of the study, managers were also asked who in their opinion can show the greatest lobbying success, the assessment followed the school grading system. The financial industry / Banks with 2.24 have the most successful representation of interests, followed by the workers representation (2.27), industry (2.28) and agriculture (2.32). 7

8 Assessment of the effectiveness of different interest groups Interest Groups Effectiveness (1-5; 1=very successful) Financial Industry / Banks 2.24 Worker s Representation 2.27 Industry 2.28 Agriculture 2.32 Building Industry 2.66 Empoyers 2.76 Environmental Protection 2.79 Trade and Manufacturing 2.90 Industries Social and Humanitarian 2.97 Interests Business Leaders 3.03 Independent Professions 3.40 Outlook on the future importance of lobbying and representation of interests Lobbying in Austria has already become a part of the everyday business life. It has been established to an increasing extent as an independent business function. The responses show the future importance of lobbying percent of the surveyed executives stated that their companies are planning to make more resources available for public affairs in the future percent say that the effort will remain the same. Only 7.2 percent believe that the effort will decrease. 8