Why your company may need its own ‘foreign minister’

  • 6/26/2021
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One of the success stories of the pandemic has been the fast speed of vaccine development, but this has not stopped some of the companies developing them from becoming political footballs. Despite the AstraZeneca vaccine’s proven efficacy, and the fact that it is being distributed not-for-profit, allowing its introduction at low cost across much of the developing world (it has been used in around 130 countries compared with fewer than 90 for its nearest rival), the jab has been questioned by many politicians, especially in continental Europe. Most recently, in Australia, the government issued updated guidance last week to recommend only those aged over 60 get the shot due to the risk of a rare blood-clotting syndrome; this despite the fact that many millions of people younger than 60 have been given the AstraZeneca jab in other nations. It is in Europe, however, where the AstraZeneca vaccine has faced most trouble. Not only have leading politicians such as Emmanuel Macron questioned its efficacy, despite having no medical or scientific qualification to do so, the company has also been taken to court by the EU over supply contracts. Last week, the EU lost its most recent legal battle to force AstraZeneca to supply 120 million doses of the vaccine by the end of this month. It went to court after the company delayed shipment of the vital vaccines, having originally committed to supply 300 million doses. The EU demand was not upheld by the judge in Brussels, but a deadline did impose on AstraZeneca a requirement to supply doses to the EU over the summer or face hefty fines. The pharmaceutical industry is not the first to face the wrath of governments during the pandemic. Last year, French digital minister Cédric O took leading technology players to task over coronavirus digital contact tracing systems, becoming the first major government minister to publicly call for Google and Apple to weaken privacy protections. What these developments underscore is the apparently growing potential for businesses, across a growing range of sectors, to become ensnared in sometimes thorny international political, human rights, technological and legal issues. This contact tracing system issue is by no means the first time that technology companies have stepped into political controversy. For instance, Google in 2013 unintentionally sparked a diplomatic row with its decision to change the name on its “Palestinian territories” homepage to “Palestine.” The move, which Palestinian President Mahmoud Abbas called a “victory for Palestine and a step toward its liberation,” provoked an immediate complaint to the company from Israel. So while this is not a wholly new phenomenon by any means, it nonetheless appears to be increasing in incidence and salience. Partly, this is driven by globalization, and also the growth of key industries including the “borderless” technology sector. Technology companies are not alone in experiencing issues from working with diverse political authorities across the world. Indeed, internationally focused companies in many other industries, ranging from energy and extractives to banking and fast moving consumer goods, have long been confronted with such challenges. Take the example of HSBC, which some UK MPs on the House of Commons Foreign Affairs Committee accused of enabling China’s crackdown in Hong Kong. HSBC has historic links to Hong Kong, and faced accusations of acting in a political manner and being too close to the Chinese authorities after it emerged that the bank had frozen accounts belonging to pro-democracy politician Ted Hui and members of his family. In navigating such situations, various international codes of conduct, including the UN Guiding Principles on Business and Human Rights, reinforce corporate social responsibility practices of individual firms. However, some of the most enlightened companies have recognised the need for a more decisive shift toward what has been termed corporate foreign policy. Corporate foreign policy aligns a company’s external affairs activity, including media relations, risk management, corporate social responsibility, government affairs, and operational planning, in a clear strategic framework. Recognizing the need for an unusual mix of core competences — for instance, in advanced diplomacy — in some of these corporate functions, means that tools, training and infrastructure can be enhanced where any gaps exist. The relentless march of globalization, with the interconnections it brings, means that few international companies will escape these pressures completely. And, at the same time, owing to the proliferation of media, and the influence of NGOs and related stakeholders, the actions of companies are increasingly under the microscope. For those companies that are perceived to misstep, the fallout can be increasingly damaging, both financiallyand reputationally. For those that are pro-active and invest in their capability, the potential rewards are ever more significant.

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