Top Five Predictions for 2023

“Let there be a special place in Hell for pundits who make predictions”, said US historian Rick Perlstein.

Given we’ve been publishing our annual top five Centre Predictions about developments in corporate public affairs since 2015, we’re likely going to Hell in a handbasket. And as Winston Churchill once quipped, “If you’re going through Hell, keep going”.

Since 2020, it sometimes felt like Hell sitting in a corporate public affairs role and working through the COVID-19 pandemic. But at other times, for many practitioners, it was exhilarating being at the centre of it all during a global crisis.

If our 2023 Predictions come to pass it will, on the whole, be a good year for the function, though there may be a few developments that will be challenges indeed.

Before we launch into our forecast for 2023, we can take stock of what we predicted this time last year and consider how that panned out.

1. The function will be an important source of geopolitical analysis.

2. The future of work.

3. Understanding and living with AI.

4. Reality check on ESG – a narrow window to influence market analysts’/news media view of what companies have been doing for years in ESG.

5. Corporations get bolshie on their COVID-19 adaption public policy advocacy.

Based on our discussions with heads of corporate public affairs across Asia Pacific, our management consulting work across the world with corporations, industry groups, and governments, our Predictions for 2023 are …

1. Sluggish New Year but no corporate public affairs contraction in 2023
Sluggish GDP growth, painful inflation, geopolitical tensions, Russia’s invasion of Ukraine and its knock-on effects, the COVID-19 pandemic that is yet to end and adaption to which is in flux, and socio-political polarisation in nations from the US, to Sweden, the Solomon Islands, and to Brazil, have contributed to spotty corporate confidence.

In this environment, corporations in developed nations are unsurprisingly looking at where they can contain or slash costs if the going gets tougher.

We forecast most corporate public affairs functions in Australia will be spared the arc of the budget-saving scythe if it mows through divisional budgets.

During the 2008-2010 global financial crisis in Australia, US and European-based corporations decimated their corporate public affairs teams. ASX-listed entities, scarred by much diminished issues management and stakeholder engagement capacity from paring back corporate public affairs headcount and budgets in the recession of the early 1990s, applied fewer cuts to those teams compared to other areas of management (the human resources function, magically, fared best of all during those years).

During the pandemic and to date, the corporate public affairs function has been regarded highly as an organisation’s window in and window out to the socio-political world: the window in, interpolating oscillating political, social, economic, regulatory mood and shifts, including in the public square; and the window out, advising, deciding, and engaging external stakeholders with the thinking, plans, decisions, and actions of the company.

In our estimation this will inoculate the function from the budget and headcount raids to which it may have been exposed during past periods of economic and geo-political uncertainty.

The Centre’s 2022 State of Corporate Public Affairs in Australia – to be published in February – reports an increase in the average full-time equivalent headcount in the function between 2019 – 2022, along with an average increase in budgets. We predict this trend will continue for the next few years.

2. US-style ‘woke’ corporate blowback not en route to Australia and New Zealand
Lawmakers in the barely ascendent majority of the US House of Representatives and in state governments in Texas and Florida (the governors of which are potential Republican candidates for President in 2024), have declared cultural and legislative war against ‘woke’ corporations for embracing ESG commitments and business models.

Time will tell whether this assault on corporations acting in their best and self-interests is transitional or sustainable.

We predict, however, such concerted and focused campaigning against corporate responsibility will not take hold in Australia.

While what purports to be ‘wokeness’ in corporations (seeking and celebrating diversity, working towards carbon neutrality, championing and protecting human rights) may be a recent and startling revelation to some lawmakers, interest groups, and journalists, embedding corporate responsibility in company strategy and modus operandi has been common practice in Australia (and in hundreds of North American companies) for more than 20 years.

Milton Friedman’s axiom that “the business of business is business” extends to corporate responsibility, including ESG performance. Managing a business in a corporately responsible manner can be good business, underpinning social license in home and export markets, and sustaining profitability.

Weaponising corporate responsibility strategy and performance in culture and political wars may occur at the fringes of socio-political discourse in Australia. However, we predict there will not be a mainstream political effort here to decouple corporate responsibility from good and profitable business practice.

3. International sustainability disclosure standards are coming
While the very thought may give conniptions to some of the US legislators cited above, we predict global sustainability disclosure standards are on the way in 2023.

Security exchange regulators have been calling for more robust, transparent, and verified ESG disclosure for some years (including the US’ Securities and Exchange Commission). Entities such as the European Commission, EU member states including Germany, big superannuation and pension funds, and proxy advisors have for some time supported international standards. As have many multi-national companies.

Most NGO sustainability advocates also support a baseline international standard.

The International Sustainability Standards Board (ISSB), established in 2021, has already developed baseline standards for disclosure of climate-related issues and risks. In late 2022, the ISSB indicated it wanted to develop standards for full spectrum disclosure of sustainability issues and risks by corporations.

We predict a single baseline for an international sustainability disclosure standard will be developed this year, and that it will be embraced rapidly by multi-national corporations to minimise the complexity and costs of disclosure, and by regulatory agencies worldwide that have applied or are moving to apply minimum sustainability disclosure standards for all large companies.

4. News outlets will use AI to more closely scrutinise corporations and industries
As high school and university students of a crafty ilk investigate how the Artificial Intelligence tool Chat Generative Pre-trained Transformer – ChatGPT – can generate essays of high distinction, AI is becoming quite the asset in the newsrooms of publishers and broadcasters who can afford it.

Our 2022 Predictions forecast more corporations would need to better understand AI and how their organisation, supply chain, and stakeholders used and were affected by AI; and that corporate public affairs teams would find themselves managing more AI-related issues.

In 2023 we predict news organisations will be increasingly harnessing AI to thoroughly interrogate information issued by and about companies, and as part of investigative reporting into corporations, industries, and the corporate sector.
This will result in more scrutiny of the activities and performance of corporations, as well as their impacts.

Large news organisations already use AI tools as part of reporting on sport, schools, real estate, and the data-related components of executive remuneration.

AI reporting tools including transcription services, entity extraction from documents, claim/fact identification, and social media event detection are embedded already in large newsrooms. Newsroom AI can also recommend information sources, search and tag photos, monitor gender and racial bias in stories, and collate financial data across reports and bonuses to make financial calculations.

This is a boon for journalist-constrained newsrooms, enabling rapid search and collation of data for analysis and reporting that would have chewed through hundreds of reporter research hours. And good news for commentators and entities calling for more corporate scrutiny and accountability.

For corporations, it means that anything stated or published by them, or said about them or their industry, will be more readily available to journalists, including patterns of behaviour (actions and inaction).

One aspect of this development is that AI outputs are only as good as human inputs into how a tool will work, as the litany of failed AI outputs demonstrate (motor vehicle autopilot crashes, racially biased facial recognition, sexist recruitment screening, non-factual reports of gender bias in some universities).

The challenge for news publishers and their defamation lawyers is to ensure AI inputs into reporting and analysis is consistently accurate. The challenge for corporate public affairs teams is to understand how massive loads of data and pattern behaviour in their organisation and industry can be mined and analysed thoroughly and rapidly.

5. CEO remuneration in the spotlight – again!
The road to being a seasoned corporate public affairs practitioner is potholed by incoming fire from journalists, shareholders, and elected representatives, outraged by increases in CEO remuneration.

There is a cycle in Australia for demonising corporate ‘super profits’ and executive remuneration. We predict we’re at the beginning of the next one.

While CEO remuneration has never been off the issues battlefield, we predict that 2023 will see the issue in the direct line of fire again as cost-of-living pressures squeeze most Australians, and corporations in some sectors (banking and finance, energy, supermarkets, airlines) report big profits.

Despite Apple CEO Tim Cook requesting a 40 per cent cut in his 2023 remuneration package to $US49 million, and Qantas chief Alan Joyce’s total 2022 $5.5 million in take-home pay (including bonuses and stock appreciation) down 77 per cent of his pre-pandemic package - most CEOs in ASX Top 100 companies received bonuses in 2021 – 2022.

The Way We Were – Centre Top Five Predictions in years past

The year that was: Centre Top Predictions for 2022
1. The function will be an important source of geopolitical analysis.
2. The future of work.
3. Understanding and living with AI.
4. Reality check on ESG – a narrow window to influence market analysts’/news media view of what companies have been doing for years in ESG.
5. Corporations get bolshie on their COVID-19 adaption public policy advocacy.

The year that was: Centre Top Predictions for 2021
1. Managing issues remotely/virtually is here to stay.
2. Mediocrity is not good enough.
3. Re-imagining stakeholder engagement.
4. Crisis planning to the fore.
5. More public policy and employee activism.

The year that was: Centre Top Predictions for 2020
1. A shift from ‘cooperation’ between the corporate public affairs and marketing management functions to far more ‘collaboration’.
2. More Boards will approach and monitor corporate reputation as a material risk.
3. More community expectations of high-performance corporate responsibility.
4. The emergence of the campaign manager role.
5. More 2ICs to the corporate public affairs Head of Function.

The year that was: Centre Top Predictions for 2019
1. More companies will get involved with and engage with social issues.
2. The Investor Relations discipline will begin migrating back to the corporate public affairs management function.
3. Heads of Function will seek more diversity of thought in their teams.
4. Arms Race for advocates.
5. Campaigns and coalitions are back.

The year that was: Centre Top Predictions for 2018
1. More psychographic profiling using Big Data.
2. Boards want more frequent reputation research.
3. More demand for generalist practitioners.
4. Many public affairs teams will get bigger.
5. Corporate brand management will be back in the function.

The year that was: Centre Top Predictions for 2017
1. The evidence-base Arms Race.
2. The beginning of the end of the corporate Intranet.
3. The digital production-savvy corporate public affairs practitioner.
4. Infographic mania.
5. More women leading the management function.

The year that was: Centre Top Predictions for 2016
1. Stakeholders at the heart of corporate public affairs strategy.
2. Social Media Command Centres.
3. Public affairs night shifts will be introduced in some organisations to monitor issues, and provide rapid socio-political response.
4. Renaissance of the corporate narrative.
5. Public Affairs helping their organisation understand the Asian Century.

The year that was: Centre Top Predictions for 2015
1. Convergence of internal and external communications.
2. More cooperation between public affairs and marketing departments.
3. Application of heuristics to corporate stakeholder communications.
4. Stakeholder research becoming an essential input to public affairs strategy and planning.
5. Advent of a 'common market' for corporate public affairs skills across Australia and Asia.