Public Affairs Dialogues 2010


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Public Affairs Dialogues 2010

  1. 1. November 2, BeijingPrivate © Confidential © Edelman & Edelman
  2. 2. Agenda Welcome, Decentralization  CSR & Corporate Ethics Alan VanderMolen, Asia Pacific President, Edelman Steven Cao, Founder, Pegasus Communications Overview of Survey:  Digital Dialogue Three Pillars of Modern Public Affairs in China Mark Hass, President, Edelman China Mark O’Brien, Vice President, PAA  Conclusion: Looking forward on Government Relations complexity & decentralization Frank Lavin, Public Affairs Chairman, Edelman Alan VanderMolen Yuan Haiying, President, Yuan & Associates  Cocktail Reception Private © Edelman
  3. 3. DECENTRALIZATIONPrivate © Edelman
  4. 4. Decentralization Economic growth– Drives strengthening of Provincial and Municipal governments– Ability/need for Central Government to delegate authority Web and mobile technologies– Flood of sources and channels for consumers of news and information– Domestic voices and foreign sources Legal compliance complemented by social compliance– Changing legal and regulatory environment– Great social expectations Private © Edelman
  5. 5. Pyramid Model of Authority Organization Mass Audience Private © Edelman
  6. 6. Traditional Influencing Model Your Name Here
  7. 7. A New Era Of Public EngagementA new model hasemerged: PublicEngagement Cloud Your Name Here Private © Edelman
  8. 8. ABOUT THE SURVEY Private © Edelman
  9. 9. About the Survey Aims and Objectives of the 2nd Dialogue- Research and benchmark- Debate and challenge- Distil into white paper * Chatham House rules – open debate * White paper: answers and Three Pillars of Public Affairs in China questions…and more questions- Government Relations: Tough and getting tougher- CSR: Social license to operate- Social Media: The digital citizen Methodology- 104 respondents- Online between October 1-28 Private © Edelman
  10. 10. GOVERNMENT RELATIONS Private © Edelman
  11. 11. Government Relations: Tough and Getting Tougher76% believe GR is more difficult in China 68% feel GR will be even more challenging inthan in the West the future 80%80%70% 70%60% 60%50% 50%40% 40%30% 30%20% 20%10% 10% 0% 0% More difficult Less difficult More challenging Less challenging Q15. The government relations landscape confronting Western MNCsQ 14. Practicing government relations in China is: Net top & bottom 2 box in China is becoming: Net top & Bottom 2 box Private © Edelman
  12. 12. Decentralizing Government Relations Practices Agree Disagree Neutral Local government in China is rapidly rising in importance as it takes on a greater role in 78% 2% 20% economic development and commercial investment issues The rise of second tier cities means government relations and public relations strategies must be 70% 8% 22% devolved from national to local levelsQ16. State your levels of agreement/disagreement with the statement (Net top & bottom 2 box) Private © Edelman
  13. 13. Government Relations:Tough and Getting Tougher More potential for  Provincial and municipalchange in China’s business decision-makersenvironment than any increasingly involved inother major economy operating decisions Strong positive  Even at Central level,commercial prospects for diffusion of decision-most MNCs, balanced making authority requiresagainst more difficult MNCs to help shape aregulatory environment. consensus across multiple Ongoing debate in China institutionsbetween economic – Bloombergrationalism and economicnationalism Private © Edelman
  14. 14. Government Relations: Tough and Getting Tougher Sustained over-performance of China’seconomy contributes to nationalism,protectionism and creates local champions Increasingly open architecture andmultiple decision-makers and regulatorsheightens the complexity for MNCs Opportunities in China have never beengreater; risks have never been higher– US exports to France vs China Private © Edelman
  15. 15. Implications for Government Relations 1. Are your PA-PR-CSR functions coordinated? 2. Do you just monitor/consult in GA or do you try to influence government activity/policy? 3. How do you tackle challenges at the provincial and local level? 4. How is your PA budget in China set? 5. How do you build-up PA operations, including head office calling schedule? Private © Edelman
  16. 16. CSR & CORPORATE ETHICS Private © Edelman
  17. 17. Impact of Rapid GDP Growth China’s GDP growth is set to place higher explicit and implicit obligations as companies are expected to address societal needs Lower 11% Same 35% Higher 54% 0% 10% 20% 30% 40% 50% 60%Q12. The development of GDP-focused growth in China means that companies will face (Net top & bottom box) Private © Edelman
  18. 18. A View on Social Responsibility Agree Disagree Neutral Chinese government expects foreign MNCs to have a 72% 7% 21% higher standard of CSR than domestic operations & SOEs CSR in China is more central to our overall corporate 21% 47% 32% strategy than it is in the West CSR in China is more closely aligned with government 61% 18% 21% strategy than in the West The government in China is committed to ensuring that 48% 11% 41% companies treat workers betterQ13. State your levels of agreement/disagreement with the following statement (Net top & bottom box) Private © Edelman
  19. 19. CSR and Corporate Ethics: Social License to Operate Greater number of participants in the debateabout a corporation’s responsibility to society All corporations are exposed to pressures to be“good”, with social media used when they fall  Implicit and explicit obligations for MNCsshort. – Audit to preserve and enhance license to operate in- Trust Barometer: 75% in China more likely to trust a China’s increasingly crowded and complex marketscorporation that partners with an NGO to battle global  The ‘citizen consumer’ is rising leading toissues Governments responding to increased call for Citizens and competitors will fact-check and actionexpose corporate wrong-doing in a continuouscycle of finger-pointing Private © Edelman
  20. 20. CSR and Corporate Ethics: The New Government Decree Three Key Reflections of Central Leadership’s Attitude:  Harmonious Society  Scientific Development  Sustainable Development Sustainable Development has become a high-priority state policy, expected to guide the current transition in industrial restructure and upgrade – while China is gaining its economic strength and quickly converging with the world in all aspects. To answer government’s new call, the upcoming 2010 Summer Davos in Tianjing takes the theme of Promoting Sustainable Growth Private © Edelman
  21. 21. CSR and Corporate Ethics: Social License to Operate Environment continues to be a key issue,  Labor laws: CSR and stakeholderleading to the creation of relationships engagement are being fusedbetween government, NGOs and - Employees are rapidly becoming one of thecorporations most significant stakeholder groups Edelman’s 2010 goodpurpose study:- 84% in China expect corporations to take action topreserve and sustain the environment- 82% in China agree government and business needto work together more closely to ensure theenvironment is protected- 80% in China would support legislation thatrequires government to fund partnerships betweenpublic and private organizations to help protect theenvironment Private © Edelman
  22. 22. Government Expectations Looking to Business Leaders to Participate in Public and Social Management as Pioneers and Thinkers Investment, advanced products & technologies and contribution to the GDP are still important. More important is your role in helping China solve social and environmental issues that impede its sustainable development. Chinese mainstream media are seeking out those who set good examples which promote China’s sustainability in social, economic and environmental arenas. Private © Edelman
  23. 23. Implications for CSR & Corporate Ethics 1. How do you comprehensively integrate CSR into corporate strategy for business in China? 2. How do you align CSR strategy with government concerns and policies? 3. How can you achieve the step change from CSR to sustainability? 4. Government expects more of MNCs than local companies, but strategy doesn’t match up. Why? 5. To what extent do Chinese country managers have the ability to determine CSR priorities? Private © Edelman
  24. 24. SOCIAL MEDIA Private © Edelman
  25. 25. Digital is More Important, but Companies Are Engaging Less Social media is important to public affairs 79% strategy in China 74% Opinions expressed in online and social media 54% are more influential than other channels 67% 2010 2009 We fully utilize social media platforms as part of 10% public affairs strategy 17% 0% 20% 40% 60% 80% 100%Q7. Top 3 Box Important; Q9. Top 2 Box Influential; Q8 Top Box Utilize Private © Edelman
  26. 26. The Role of Social Media Agree Disagree Neutral Social media is beyond my company’s control 39% 38% 23% Social media is beyond the government’s control 27% 40% 33% Social media is a form of digital democratization 66% 25% 9% The Chinese government is responding to 58% 35% 7% representations made via digital platforms Social media is presenting increased challenges to the 87% 6% 7% traditional mode of corporate communications and government relationsQ10. State agreement/disagreement with the statement (Net top 2 box) Private © Edelman
  27. 27. The Digital Citizen: A Populist Force Rapid user growth to continue: 380 million (2010); 840 million (2013) Urban, young, educated: Half the nation’s population is urban; 75% of its internet users live in cities Internet landscape is fragmented, but increasingly oriented toward social networks, mobile access Internet is a broad public forum in China, both a source of public opinion information for companies and the government, and a force for shaping policy and news Private © Edelman
  28. 28. The Digital Citizen: Government vs. CommunityThe Government The Social Media Community The internet, once a force to control, must  The community exerts pressure onnow be viewed as a release valve for social government because of its sheer sizepressure and a portal into grassroots emotions • Social media are part of the news cycle Substantial, but declining control of content • Mainstream media quote social media and vice Wumao Dang: The 50 Cent Party versa in an “internet amplification cycle” The Golden Shield: Blocked searches, • Eruptions of nationalism online are disruptivevanishing social media posts and troubling to Chinese policy• Growth of online community makes long-term, real-  Growing importance of onlinetime control technically unfeasible influencers creates new, populist sources of information • 60% of Sina Weibo’s 20m users follow top 10 bloggers Private © Edelman
  29. 29. The Digital Citizen: Protesters, Vigilantes, Nationalists Large Scale Internet Protests against corruption, unfair actions and“enemies” of China are a unique and powerful phenomenon of theChinese digital community 2 large-scale protests targeted government in 2003; 12 in 2009 Typically aimed at local government officials, rather than nationalleaders or policies (with exceptions)- July 2010: Internet community on behalf of Qiu Ziming vs. Zhejiangprovince paper company and police- July 2009: Internet community vs. Ministry of Industry and InformationTechnology Green Dam software initiative- July 2009: Online community vs. Hubei party and police officials overShishou incident Protests aimed at companies can be “scandals for hire” Protests often reflect strong nationalist themes- Japan, Nobel Prize Private © Edelman
  30. 30. Implications of Digital for Public Affairs 1. Why have companies been unable to engage fully in social media for PA programs? 2. How do companies monitor and analyze the voice of the Digital Citizen? 3. How can companies prevent competitors from exploiting Digital Citizens for negative attacks? 4. Can corporate GA and CSR programs be positively aligned with the power of Digital Citizens? Private © Edelman
  31. 31. Where from here?Private © Edelman