Baikal Lobridge Presents the Results of a Study on the Role of GR for CEOs

For the first time, sociologists focused not on the positions of specialized GR and lobbying specialists, but on top business executives. This allowed us to assess how the GR function is perceived within companies, what role it plays in strategic management, and how involved the management of organizations is in dialogue with the state.

The study was conducted with the support of the Russian Union of Industrialists and Entrepreneurs (RSPP), the American Chamber of Commerce (AmCham), and the Center for Eurasian Cooperation (CEC). At the same time, personalized offers to complete the survey became the most effective way to attract the attention of respondents — 15% of the 150 invitations received a response.

Below we reveal the key results of the study.

Implementation of the GR function

The majority of the surveyed managers (75%) of large and medium-sized businesses reported that their company has a GR function. However, the ways of its implementation turned out to be diverse. In about half of the cases (52%), it is represented by a GR division, and in a quarter of companies (24%) it is represented by one specialist. In other cases, companies do not have a GR division, but the function itself is present. It is represented either by the CEO himself or his deputy, or by related departments (for example, lawyers).

At the same time, despite the increasing complexity of the regulatory and political environment, there is currently no trend towards strengthening and actively developing the GR function. And in companies where the GR function is not implemented, there is rather no trend towards its creation.

Involving management in the GR function

The study showed two main types of involvement of top officials of companies in the implementation of the GR function. The majority of companies surveyed (58%) practice an active CEO role in its implementation, involving setting goals and participating in their solution. In 17% of cases, the direction is perceived by the management as completely autonomous. In 13% of CEOs, they sometimes participate in his work, but only at the level of meetings with high-ranking officials.

Budget issues

Among the heads of companies that have a GR function, the overwhelming majority of respondents (83%) noted that a separate budget is allocated for it. First of all, this applies to large companies. The most popular items of expenditure for GR functions are membership fees to industry associations or business associations, representative expenses, and payroll.

Audit of the GR function

42% of the heads of companies that have a GR function noted that they consider the economic effect of its implementation. There is currently no single calculation methodology in Russia, and the approaches of the companies differ significantly.

The following methodological frameworks can be distinguished:

• prevented financial losses due to reduction or elimination of risks;
• increasing financial results due to the created GR opportunities;
• the amount of government support involved: both direct and through benefits;
• calculation of added value in financial terms;
• the financial effect of removing or reducing barriers to business when entering markets, etc.

The strategic role of GR

The study revealed differences in the perception of the strategic role of the GR function due to both the size of the business and the jurisdiction of the company. Large Russian businesses see its role as maximally comprehensive. The emphasis is on institutional sustainability, synergy with the government, image management, leveling regulatory risks and rulemaking, as well as creating opportunities to increase profits.

Large foreign companies in "unfriendly" jurisdictions also emphasize the strategic role of the GR function in supporting business and its smooth functioning. At the same time, the conceptual position of low profile is noted, which means a restrained and modest approach, the absence of vivid public statements.

Foreign and Russian medium-sized businesses see the role of the GR function as less ambitious. For such companies, it usually comes down to obtaining state support, participating in the development of the industry, and building interaction with specific stakeholders.

GR strategies

As it turned out, in Russia, 42% of companies with a core function have a GR strategy. Among companies that do not have such a strategy yet, 29% feel the need to create one. At the same time, half (50%) of the heads of such companies found it difficult to answer the question about the prospects of strategic planning in the field of GR.

Those who declare the need to create a GR strategy are more likely to develop it on their own. But there are managers who plan to involve consultants to create a strategy. And in this case, they are more likely to turn to specialized GR consulting.

Satisfaction with the GR function

We asked the supervisors to rate the work of the GR function on a 10-point scale, where 10 means that the respondent is completely satisfied with its work. Only a few CEOs rated the work of their subordinates below average. The confidence interval, in which the average value of the satisfaction level is located, turned out to be in the range of 7.1–8.2.

This means that most managers of companies that have a function of interacting with the government see its effectiveness. But this does not mean that GR specialists lack growth points. Attention is drawn to the problem that some managers articulate: specialized specialists sometimes lack immersion in the problems of business and industry.

Other notable growth points include the creation of cases showing financial results, proximity to decision—making centers, and increased lobbying expertise. A business from an "unfriendly" jurisdiction also spoke about a problem specific to such companies: global restrictions on the use of PR tools affect the effectiveness of GR.

Working with consultants

Among companies with a GR function, one in three managers (33%) noted that businesses allocate a budget to attract GR agencies and lobbyists. External specialists are invited to cooperate most often for consulting on interaction with authorities (75%), for legal support (rulemaking) (50%), to promote legislative initiatives (50%) and to assist in obtaining state support (50%).

Among the advantages of working with consultants are a deep understanding of the media space and expertise in positioning issues in dialogue with the state. In addition, the respondents emphasized the high level of awareness of consultants and effective monitoring of initiatives. The honest approach of the consultants was also noted.

As negative aspects of working with consultants, the CEOs noted the lack of coordination of work with the business, the level of responsibility for the result, and the sometimes formal approach to work.

Eduard Voytenko, CEO of Baikal Lobridge:

The results of the study can be found in the Vedomosti edition. The full text of the study is also available.

Read about the previous two Baikal Lobridge sociological studies on the development of GR in Russia in the GR-research section.