Building business legitimacy and promoting a transparent participation through the department of Government & Corporate Affairs
The public trust in all major institutions, both public and private has faded in the Western world. Many factors have stirred the current levels of distrust. The gradual impoverishment of the middle class and the various corruption scandals reported by the media in many rich countries have contributed to a general feeling of unease towards “everything”, as Angel Gurría, the Secretary General of the OECD, reported at a recent public breakfast in Madrid.
At the same time, the economic globalization fostered by the speed of new technologies is posing new challenges to the way democracies have structured their public decision-making processes across the Western world. In the EU, 80 per cent of the national regulatory processes is led by Brussels. In the US, Washington D.C. has always been the center of power. Around the world, multilateral organizations and institutions are gaining more and more power to impose on regions and member states guidelines and principles to develop their public policies.
In this context, global businesses and organizations should address the current crisis of trust by working on two major goals: (i) building business legitimacy in the social, regulatory and political ecosystems; (ii) and promoting a transparent participation in the public decision-making process.
When it comes to business legitimacy, international corporations are redefining their roles in their relations with society. They are gathering more and more power, which requires their commitment to solve social and environmental challenges. They are asked to move beyond profit-making activity and business success, and to increase their real legitimacy within their social, regulatory and political environments. This is the only way to achieve long-term sustainability.
Transparency is another must. For decades the relationship between the public and the private has been obscure. As a result, conficts of interest, corruption, fraud and regulatory capture in favor of vested interests have been somehow the norm. New technologies and the empowerment of a global civil society is demanding more transparency in the public-private interaction. In 2010, the OECD approved its recommendation on Transparency and Integrity in Lobbying and since then more governments have introduced regulation than in the previous 60 years. In sum, there is a new culture of transparency that companies and governments need to gradually incorporate.
In view of all this, we have launched the International Executive Program of Government and Corporate Affairs at the IE Business School. Thanks to an outstanding list of participants and speakers, the program aims at gathering the best practices that will lead to (i) structure a global government and corporate affairs deparment in Brussels and Washington DC; (ii) effectively advance the corporate interests of global organizations in a legitimate way; (iii) engage with the non-market environment to achieve the long-term sustainability of the organization; and (iv) carry out their activity under the ethic and transparency principles set forth by the OECD.