There is a disconnect. Our research shows how many corporate affairs directors have ambitions to move into other business leadership posts or take on NED roles. Yet so few are achieving their goals. We spoke to these communications leaders, as well as to FTSE chairmen, to understand where the problems lie. There was a wide range of opinions, but a number of common themes emerged.
COMMUNICATIONS SPECIFIC BARRIERS
We first looked at obstacles which are specific to the communication industry or to candidates working in the communications profession. 15 points were identified, all of which are interlinked.
A specialist function that is not business-critical
There is a view that communications is a specialist function and is not seen as either strategic or business critical. This despite the increasing importance of reputation, trust and advocacy across all areas of an organisation. Communications is often relegated to a support role and it takes a strong strategic player to break through, even when trying to move laterally across an organisation.
Perceived as lacking intellectual rigour
There remains a perception that communications directors do not possess intellectual rigour outside of their field of expertise, which is partly driven by the behaviours of some within the profession itself and is partly legacy. Many communications directors are acutely aware of this perception and whilst most rail against it, these negative connotations still exist.
The negative perception of the communications profession
Ironically for a discipline predicated on creating positive impressions, the communications function has an image problem. The negative perception of the profession was seen by many as one of the main barriers preventing practitioners from being considered for other management roles. Can it really still be viewed as being “all about the dark arts”? Consider the words of one former corporate affairs director who has now gone on to become the CEO of a trade association.
Bizarrely I probably have a better chance of securing an NED role from my current role as CEO of a trade association than I did when I was a corporate affairs director. This despite the fact that I now manage a much reduced budget (circa £10m versus £80m) and have a substantially smaller team (60 people versus 400). My corporate affairs director role was much bigger in every aspect but it’s simply not seen in that way.
CEO, former communication leader
Limited commercial acumen
An issue which was heavily flagged by chairmen and also raised by some communications directors was the perception that communications leaders lack commercial acumen. Even though many corporate affairs directors manage multimillion pound budgets – often larger than some small businesses – not having direct P&L responsibilities and rarely being involved in the money-making arm of a business was seen as a distinct disadvantage.
This means that communications directors are not considered for more commercial roles within an organisation and they are rarely seen as equal in status to those with P&L responsibility.
There is a general assumption that communications directors ‘do communications’. However the skills of insight, business acumen, influence, judgement and so on which go along with that position should fit equally well in wider business roles.
In general I believe that corporate affairs directors lack an innate understanding of the commercial imperative that runs through an organisation.That is not to say they don’t have a commercial understanding, but some don’t fully understand how deep that mind-set runs through a business.
Lack of understanding of the communications discipline
The relative youth of the corporate affairs discipline means that it is often not understood by non-practitioners. This lack of understanding is particularly prevalent among some generalist headhunters and in the lower levels of the FTSE (250 and below) as many of these organisation don’t have dedicated corporate communications functions and so do not know the value corporate affairs can bring to an organisation. Ironically it is often these smaller market cap firms that would benefit most from having a corporate reputation specialist sitting on their board.
Inconsistency in the remit of the communications director
Unlike similar support functions (such as company secretary, human resources director or general counsel), there is no common ‘spinal cord’ of activity for the communications director, no universally recognised brief for which the corporate affairs leader is exclusively and directly responsible. In the past, media relations was probably the one defining feature of the communications department, but even this isn’t consistent across organisations and the role of the press officer itself can have negative connotations. So while some communications directors may be excellent potential candidates for NED roles, the inconsistent remit of the communications post makes it harder to single those candidates out.
Large variation in job titles
This variety in role and remit is exacerbated by the huge array of communications job titles which give little indication of the post-holder’s responsibilities or levels of seniority. By way of example, participants in this research had a wide range of titles such as corporate affairs director, corporate communications director, head of external relations, SVP public relations, VP corporate communications, chief communications officer, public affairs & corporate communications lead, general manager public relations, head of external affairs, SVP reputation and communications and so on. This makes it very difficult for those outside the communications industry to understand exactly where the incumbent sits within an organisation, what their responsibilities are and how much experience they have.
Reporting lines vary
Adding to the confusion, the reporting lines for communications directors varies tremendously across different organisations, with some companies locating their communications experts outside of the main decision-making theatres, or lumping them in with other departments. A CEO reporting line predominates, but some report to human resources, corporate services, marketing and finance, amongst others.
Disparity in the quality of communications leaders
Aligned to the above, there is a considerable difference in the quality of corporate affairs and communications directors from one company to the next. Some are highly experienced professionals that run formidable teams with extensive budgets, are active members of the executive committee and are involved in the overall strategy of the business, whilst others are little more than press officers reporting to an HR or marketing director. The latter are highly unlikely to qualify for a NED role, but the confusion over titles means this cohort is holding back the prospects of the former. This disparity means that some CEOs and chairmen may have never been exposed to these highly professional, senior communications operators and therefore have limited understanding of the value they could bring to another leadership role.
There are not that many very senior corporate affairs roles and some are still filled with people who are not specialists. This devalues the role and the skills needed which then makes it harder to show why good corporate affairs directors should be considered for wider strategic roles such as non-executive directorships.
Boards’ use of external advisors
In-house communications directors are competing directly with their PR agency peers (and other external advisors) for access and representation at the highest level. As corporate reputation rises up the business agenda, boards are increasingly turning to their external PR advisors, such as the likes of Brunswick or Finsbury, for help and counsel. This has a twin effect on the career prospects of a senior in house communicator. On the one hand, they are competing for attention of their own CEO and chairman, who may not consider them for lateral, internal job moves if they are not even able to position themselves as the out-and-out expert in their own field. PR agency heads can demonstrate that they have run entire businesses, have wide sector experience and tend to have stronger connections in the CEO and wider leadership world.
On the other hand, the fact the chairmen has experienced communications counsel on the end of a phone, plus his company’s own inhouse team, appears to underscore why he does not need to give away a precious NED role to someone else in communications. Certainly, it is unlikely that retained external advisors would back such a move if it threatened their own relationship with the company because the new NED brought their agency contacts with them.
Reputation management is not sufficiently valued nor measured
The management of reputation, issues and stakeholder engagement (the key responsibilities of the communications director) is often not valued or leveraged until there is a crisis. Often reputational advice is sought by boards after a crisis has erupted, meaning it is reactive and in ‘crisis mode’ rather than preventative. And that board advice is usually provided by lawyers that tend to focus on reducing legal risk rather than safeguarding and enhancing brand perceptions. Aligned to that, the lack of tangible measurement criteria on the impact of an effective corporate affairs strategy continues to plague the communications profession, and the leaders within it.
Many companies don’t factor reputation management into their business strategy and even if they do, they struggle to measure it. This is particularly true in businesses and industry sectors where the ‘brand vs beans’ equation is more heavily skewed towards beans and the needs/wishes/direction of the bean counters.
The communications recruitment process
The lack of understanding about what corporate affairs is and what it can do is sometimes propagated by generalist executive search firms and human resources directors who often don’t possess the specialist knowledge to be able to interrogate communications applicants sufficiently. They then hire badly suited candidates into senior communications roles, creating a virtual circle of misunderstanding.
Actually the hiring process is an issue too – specialist operations like yours know well what they are doing, but sometimes the search for senior roles is awarded through a global mandate to people who simply haven’t a clue.
Not enough communications leaders on the executive committee
This is critical. The vast majority of FTSE chairmen we spoke to stated that they would not consider a candidate for an NED role unless they had first been a member of their company’s executive committee (ExCo). Because just under 50% of FTSE100 corporate affairs directors are members of the ExCo, it means that half of the practitioners at the highest level are automatically ineligible for wider, part-time roles.
Clearly it is the CEO who has the biggest influence on whether senior communicators join the ExCo. Their lack of representation is perhaps a reflection on the incumbent but also because companies are keen to keep down numbers on the senior leadership team. It demonstrates that communications leaders have still some way to go to show their current executive, as well as future employers, that they can help run a business and contribute beyond their direct remit.
Associated with this is the issue of corporate affairs directors’ limited exposure to the board. Most communications leaders tend to visit the board only once or twice a year – generally for a functional review or as part of the annual report process – and so, unlike other functions such as HR, tend to have limited visibility and engagement with the board as a whole.
Lack of professional development
A lack of deep, and respected, professional development was flagged as an issue, with some pointing out that it will take time for the CIPR (Chartered Institute of Public Relations) status to embed itself into the requirements headhunters and HR teams are given when sourcing new communications practitioners.
In terms of company-driven professional development, organisations are still much more likely to support development in say their operations directors than in their communications directors. Some respondents believe that there is a tendency to keep talented communications people focused in that area rather than developing them into broader management positions.
Lack of understanding of how to find an NED role
Many communications leaders confessed to not knowing how best to go about securing NED roles. The fact that there appears to be so few opportunities available to them, as well as the dearth of examples of other communications leaders who have been appointed to NED posts, means that they struggle to identify the best route forward.
Even those communications leaders who have managed to secure trustee positions are finding it difficult to determine the best route to secure paid-for NED posts.
I am completely unaware of any opportunities in the NED space for communications leaders. There’s not one of my peers who have made the move and despite my best attempts at breaking through, I feel that I am constantly hitting my head against a brick wall.
There are a number of other, more general barriers that respondents identified as potential blocks to senior communicators securing other leadership roles, including NED positions. The majority of these barriers are relevant to other functions. Combined with the extensive issues listed above, they illustrate the difficulties that communications directors experience in developing their long-term career prospects.
The NED recruitment process
There are different processes and channels for recruiting NEDs depending on the size and make-up of the organisation. The recruitment process – usually via headhunters, HR and nominations committees – can be confusing, formulaic and opaque. The majority of board roles are never advertised (unless they are in the public sector), and FTSE NED positions tend to be recruited via traditional NED executive search firms. However, whilst the use of NED headhunters is often cited as best practice to ensure equal access, many communications directors struggle to make it through the door, let alone onto short-lists.
Some respondents point out that headhunters are often not interested in looking for ‘new blood’ and tend to go for the easy option rather than fight for less obvious candidates such as corporate affairs directors. This can be exacerbated by the nominations committee which frequently reinforces existing board make-up and seek appointees from similar backgrounds and experience.
Recruitment of NEDs seems like a closed shop with a small number of headhunters putting forward the same profiles.
Limited number of ‘spare’ NED roles
Boards are getting smaller – or at least should be. Most chairmen we spoke to believe boards in excess of 12 people result in slower decision-making and more difficulty in processing and governance. But smaller boards mean that there are fewer NED opportunities. It is worth analysing the make-up of a “typical” plc board of say 8 members. There are two executives (CEO plus finance director) and six NEDs. We assume that the chairman and Senior Independent Director (the main foil to the chairman) are former CEOs or finance directors and might chair a sub-committee handling remuneration or nominations. One NED must have a strong accounting background to chair the audit committee. Our research suggests that two further roles will supply industry-specific experience. That leaves corporate affairs chiefs fighting it out for the ‘other’ NED role that typically brings general business expertise, marketing, consulting or an international focus to the boardroom.
In addition, opportunities do not come up frequently. Most boards obey governance rules which assume that NEDs lose their independence after nine years – although some hang around for longer.
I’ve never wanted a board that is larger than 12 people as you can’t have a proper discussion. Too large and it becomes about speech-making rather than candid discussions. You want a compact, effective board.
The diversity drive
The old boys’ network has been broken up by the diversity drive of the last five years. In the past, senior leadership teams were homogenous and dominated by men who had similar styles and opinions. This network was where business got done and had unwritten rules that marked out the insiders and the outsiders.
Things are changing, albeit slowly, largely as a result of the increased pressure on companies to have more diverse boards in terms of gender and ethnicity. For women starting out on the NED route today, it is probably easier to secure an NED role than it is for a man. There are still a limited number of female NEDs and boards are particularly keen to hire females to fill their unofficial quotas.
However, while changes are bedding down, respondents believe there is not enough action in terms of bringing ‘diversity of thinking’ to boards. This they argue, would allow for more corporate affairs directors to be considered for NED positions.
It is worth pointing out that corporate affairs directors offer a deep pool of talent from which to address both types of diversity. Not only do they bring a new skill set to the boardroom table, but, with the possible exception of human resources, this role is more likely to be filled by a woman than any other on the ExCo.
I think the era of chess-board management, with senior non-execs moving from one board to another, is ending. These people are now too old (coming up to 70) and that coterie is waning. Some are also a bit tarnished. There’s more openness coming through with the advent of the venture capitalist making things a lot more open.
As highlighted earlier, in order to be an NED one has to ideally have previous experience of being an NED, which creates a Catch 22 situation. Most NEDs are already NEDs. It can be a vicious circle trying to get on to a board, with most getting their first NED role through someone they know.
There’s a lot of backscratching in the NED world and there is a revolving door, so it’s hard to break through.
Current company not supportive
This is another crucial, general point – but particularly relevant to senior communicators. While some companies actively encourage their senior staff to pursue outside NED opportunities, others are far more reluctant. In some organisations, executives are positively discouraged from applying for NED roles.
Some communications directors have been told explicitly that, as the key executive in charge of their organisation’s crisis communications management, they cannot be spared from the organisation in case they are overseas or unavailable should a crisis erupt within their current organisation. CEOs and chairmen don’t like the idea that ‘their’ corporate affairs lead should be helping someone else with reputational matters just at the moment they need them most. As with other functional heads, their main job takes priority.