By Penny Burtt, Group Chief Executive Officer, Asialink and Mukund Narayanamurti, Chief Executive Officer, Asialink Business
Capabilities in external affairs are vital for both navigating risks and creating value in Asian markets. Too often Australian companies focus on the issues of bribery, corruption and regulatory complexity in Asian markets, the impact these issues could have on their corporate brand and reputation without adequate consideration of the strategy and structure of their external affairs function – the very function essential to manage these issues.
Understanding how the best multinationals organise and execute their external affairs is core to managing stakeholders, brand and reputation in Asian markets. Focusing on and bolstering the external affairs function is the most robust approach to managing issues and crises in Asian markets, and the possible impact on market perceptions and the share price of companies committed to business engagement in the region.
One of the region’s leading external affairs experts, Anna Whitlam, says: “The discipline of external affairs has changed so much in the last 10 years – from a tactical crisis response to playing a significant role in mitigating risk and enabling market access. Today’s external affairs leader is also the organisation’s Chief Sense-Maker! They are experts in synthesising data, news and information in the internal and external environment, using their judgement to feed into group executive, CEO and board to enable sound decision-making.”
In an insightful discussion with Anna Whitlam, Alan Butler, the former head of Diageo’s centre of excellence for policy and public affairs, said: “Hope that the current volatility passes is simply not a strategy. Organisations dependent on a global view must have a geo component to their business strategy. To ensure a business is prepared for the complexities it will undoubtedly face, it must develop its own version of corporate foreign policy and ensure there is an external radar influencing business decision-making”48.
Recent research by Weber Shandwick49 has confirmed that reputation makes a meaningful contribution to business success. Global executives attribute 63 per cent of their company’s market value to their reputation. In Australia, this is at 58 per cent, Indonesia 73 per cent, Singapore 53 per cent, China 65 per cent, Hong Kong SAR 47 per cent, Japan 58 per cent, the Republic of Korea 63 per cent, and India 69 per cent. These findings highlight that for Australian companies expanding into Asian markets, carefully managing their reputation with a range of stakeholders will be critical.
This section focuses on the value of establishing the external affairs function as a top priority, priority stakeholders to engage with in the region, how the best companies structure their external affairs function, and understanding the role of the media and its influence on Australian companies doing business in Asia.