How PA Complacency Harms the Bottom Line

Stefan Borst, Senior Partner Advocacy Strategy

Boardrooms today buzz with complaints about mounting bureaucracy. And rightfully so. Imagine launching your next big product, the expansion of a plant or the entry into a new market - only to see it stall because of bureaucratic issues and compliance hurdles. 70% to 90% of business leaders percieve red tape as a major hindrance for succes. Yet few executives connect the dots: Bureaucracy does not appear out of thin air. It is created slowly. And there have been ample chances to stop or change this early on. Today’s bureaucratic burden is the price for yesterday’s public affairs inaction.

Why Regulation Isn’t Just “Red Tape”

While supply-chain risk or market risks are usually well analysed by companies. Political and policy risk (and opportunity) still does not have the visibility it should have – despite the major consequences of changes in theses areas on the bottom line. Here are three steps to change this :

1.     Consensus Isn’t Influence Corporations tend to default to industry associations for political expertise and clout. Yet by design, these bodies chase the lowest common denominator. Your unique priorities get watered down (unless you control the association). Associations are a great tool – but you need a whole set of tools to effectively work on political issues. If you don't, NGOs or more agile competitors deploy targeted campaigns, securing bespoke rules of their own design.

2.     Blind Spots in Risk Management Do you hedge currency swings or supply-chain shocks? Why treat political risk like a bolt from the blue? Waiting for the Public Affairs team to “fix” a surprise regulation adds cost, chaos, and incurs lost opportunities. Influence must be dialed in continuously, not turned on in a panic.

3.     Public Affairs = Profit Center If you still see Government Relations as a soft cost, you’re playing defense in perpetuity. Imagine instead quantifying regulatory impact alongside operational and financial KPIs—turning policy engagement into measurable value, rather than a budget line to cut.

A Three-Step Blueprint for Boards

There are some simple steps to signigificantly improving the effectiveness and efficiency of your PA investment.

1.     Audit Your Advocacy Conduct a surgical review of your political-influence setup. This includes your internal setup. Do you have the right people, tools and processes? Do horizontal functions like Communications, Government Relations and Legal work well together? Where does your voice fade? Which capabilities need upgrading? A crisp advocacy audit delivers immediate clarity on priorities.

2.     Embed Political Risk in Strategy Map potential political and regulatory shifts as rigorously as new market entries. Quantify the risk. Assign probabilities and price tags — then integrate them into your three- to five-year planning cycles.

3.     Shift to Proactive Policy-Shaping Move from reactive last-minute-lobbying toward targeted and structured policy-shaping. Utilize a multi-stakeholder approach. Build coalitions, craft compelling narratives, and provide technical input early in the rule-making process.

The Boardroom Payoff

·       Reduced Compliance Drag: Less firefighting more pro-activeness.

·       Increased Competitive Edge: Shaping beneficial market environments instead of reacting to detrimental ones.

·       Lower Political Risk: Anticipate shifts instead of scrambling to comply.

·       Higher ROI on Strategic Planning: Turn Public Affairs into a predictable, measurable driver of value.

Final Thought

Executives who treat regulation like weather – something to endure, something

that can't be influenced – may find themselves trapped in storms of their own making. Boards that recognize policy as a strategic domain will steer their companies into calmer seas and leave competitors behind.