A transparent approach to lobbying needs to be taken if companies are to protect their reputations, according to a report by the Business and Democracy Commission released today.
It warns that the operating environment for business has changed and that “political pressures — from populism and weak policymaking to disinformation, values conflict and scrutiny of lobbying — are no longer background noise”.
The report adds: “They represent material risks that can damage markets, disrupt operations, and erode reputation if not handled strategically.”
The Commission, established by the CIPR, Ipsos, and Jericho Chambers, is chaired by Sir Ian Cheshire, who is also chair of Land Securities Group.
It aims to “help businesses navigate today’s volatile political and cultural landscape – and secure their licence to operate in the years ahead”.
The Commission’s ‘Navigating Growing Political Pressures’ report outlines how comms issues are among the major risks facing businesses today. It draws on interviews with corporate leaders and warns that “opaque lobbying creates reputational drag, regulatory risk, and stakeholder mistrust”.
The report calls on businesses to “ensure that political engagement is transparent, consistent with their public positions and framed as advancing legitimate shared interests — not narrow corporate gain”.
“Lobbying is most effective and trusted when it is transparent, consistent and accountable,” it says, and firms need to ensure consistency between advocacy and lobbying, for “mistrust is heightened when corporate lobbying contradicts stated commitments”.
The report cites how “several participants described formal review processes to ensure trade association memberships or political donations were aligned with corporate values”. It adds: “When inconsistencies were found, some companies made the decision to withdraw and communicated this openly - strengthening legitimacy even if the decision attracted criticism.”
It advocates taking proactive steps to transparency, such as embracing voluntary disclosures “which align with your business values to build trust with stakeholders” as well as ensuring that “all lobbying activity is transparent and aligns with your values”.
The report also warns how "disinformation isn’t just a PR headache - it’s an operational and financial threat.” It recommends that organisations take a proactive stance, from monitoring the problem to establishing “rapid-response protocols” and working with “regulators, media platforms and stakeholders to minimise impact".
It concludes that companies should be “creating frameworks for authentic advocacy, embedding engagement and participation inside their organisations, and strengthening governance, transparency and narrative”.
Commenting on the findings, Alastair McCapra, chief executive of the CIPR, said: “In today’s highly charged political environment, reputational risk can no longer be managed reactively or left to chance. It is now a strategic imperative for boards to ensure they have the right expertise in place to guide businesses through sustained and challenging uncertainty.”
He added that business leaders must “move beyond ad hoc responses and embed robust and good governance practices and a coordinated approach to political engagement.” This will make them “better positioned to navigate a polarised landscape and build long-term resilience”.