Is the million-pound pay package a measure of the rising influence of Corporate Affairs?

27 Sep 2018

Is the million-pound pay package a measure of the rising influence of Corporate Affairs?

Our study into the pay and structure of corporate affairs at top FTSE companies revealed that Corporate Affairs Directors (CADs) can now command near million-pound pay packages. This is an indication of how businesses increasingly recognise the value of their corporate reputation.

The study revealed that around 10% of CADs, with corporate affairs teams of up to 500 at the biggest FTSE 100 companies, have pay packages exceeding £750,000. A further 40% exceed £500,000. (Long-term incentive plans, linked to the share price, are a powerful element of this remuneration.)  

The salary figures we uncovered illuminate a wider truth, as Hannah Peech, Head of the Odgers Berndtson Corporate Affairs Practice, and author of the study, emphasises.

“Top companies now clearly regard corporate affairs as mission critical and a key business enabler. A strong corporate story and reputation is no longer a nice-to-have but an essential driver of success and the pay and structure of corporate affairs teams reflects this.”

Closer to strategy

The growing board-level awareness of the importance of corporate affairs can also be seen in the reporting lines and structures at top companies. Our study shows that six out of ten corporate affairs directors now report directly to the Chief Executive and around half sit on the executive committee.

Both cases indicate that Corporate Affairs Directors have now moved closer to affecting business strategy.

Another trend reflecting a rise in the function’s influence is the time being spent with the Chairman and Board, as external stakeholders demand more accountability about the corporate profile and reputation management.

Patchy picture

“Whilst the rising strategic importance of corporate affairs at top companies is very encouraging, elsewhere the picture is quite patchy. We expect the function to continue to grow in importance, but this will take time.”

Around a third of Corporate Affairs Directors studied have base salaries of £210,000 or below, some with teams of just five – around 100 times smaller than the largest.

Common themes

Our research also revealed a number of other common themes. For example, almost two thirds (60%) of Communications Directors have reduced their use of external consultancies in the past five years.

Businesses are clearly taking more direct control of corporate affairs as a strategic function. Increasingly, agency support is focused on niche advisory and specialist services.

Increasingly international

Without exception, all those taking part in the Odgers Berndtson study were responsible for the UK, plus at least one other geographic region. Most have a responsibility for the EU. 63% have an additional responsibility for Asia and North America, and 56% for Africa.

The final finding was that corporate affairs is becoming increasingly responsible for internal communications and employee engagement. In fact, 86% do exactly that. For those who do not have internal communications as part of their remit, the message is that it restricts their ability to be successful.

If you would like to read our full report, titled ‘Corporate Affairs. Redefining the role, releasing the potential’, please click below:

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