Aligning Research and Development with Public Affairs

Welcome to Inside Corporate Affairs, where we discuss the latest developments and best practices in achieving corporate affairs excellence. In this edition, UniCredit's hostile takeover of Commerzbank faces fierce opposition, but what role can government relations play? Microsoft and G42 navigate US export restrictions in AI tech race - how can you leverage strategic partnerships to influence international policy? And as Rio Tinto faces public backlash over its Serbian lithium mine, how can you use community engagement to support investment outcomes? All of this and more, with our focus of the week - aligning research and development with public affairs.

This Week in Corporate Affairs

• UniCredit's Hostile Takeover of Commerzbank Faces Fierce Opposition
• Microsoft and G42 Navigate US Export Restrictions in AI Tech Race
• Rio Tinto Faces Public Backlash Over Serbian Lithium Mine

UniCredit's Hostile Takeover of Commerzbank Faces Fierce Opposition

A potential takeover of Commerzbank by Italy's UniCredit has ignited significant tensions, raising concerns over its impact on Germany’s economy. Commerzbank, Germany’s second-largest bank, warns that the takeover could jeopardise domestic lending, a lifeline for SMEs crucial to the country's economic stability. This follows UniCredit’s aggressive move to increase its stake in Commerzbank to 21%, a development that German Chancellor Olaf Scholz labeled an 'unfriendly attack'. Scholz's opposition reflects broader political unease. The German government currently holds a 12% stake in Commerzbank and has voiced concerns over foreign ownership of key financial institutions, fearing that UniCredit might prioritise Italian interests, harming Germany’s local businesses. These concerns are compounded by fears of job cuts and potential credit restrictions if the merger proceeds.

UniCredit, led by CEO Andrea Orcel, countered by presenting the takeover as an opportunity to enhance both banks’ competitiveness. It argues that operational synergies could benefit stakeholders, including in Germany, though the bank’s unions and Commerzbank executives remain wary of losing autonomy and facing potential job losses. For corporate affairs leaders, this situation highlights the critical role of proactive government relations, stakeholder engagement, and strategic communication during cross-border mergers. Effective corporate diplomacy and reputation management will be essential for both parties to navigate the complex regulatory and political challenges ahead.

Microsoft and G42 Navigate US Export Restrictions in AI Tech Race

Microsoft is urging the US government for greater clarity regarding export controls on advanced AI chips destined for the Middle East, particularly in relation to its partnership with UAE-based AI firm G42. The tech giant is currently navigating delays and restrictions due to US regulations, which have impacted shipments crucial for developing AI technologies in the region. Microsoft has highlighted the need for 'clarity and consistency' in these export guidelines to facilitate its operations and investments in the UAE. The regulatory hurdles come amid growing scrutiny over technology transfers and foreign partnerships involving AI. Concerns from US policymakers centre on Microsoft's $1.5 billion investment in G42, with calls for further investigation into potential national security implications, particularly given the geopolitical sensitivities surrounding China’s influence in the region.

This situation is unfolding as the UAE aims to position itself as a global leader in AI, with UAE President Sheikh Mohamed bin Zayed recently meeting with US President Joe Biden to discuss AI collaboration. The leaders agreed to strengthen cooperation in AI research, development, and governance, although US export controls remain a significant obstacle. For corporate affairs leaders, Microsoft’s challenges underscore how companies like G42 can leverage strategic partnerships with powerful stakeholders to influence policy in third countries. In this case, G42 is using Microsoft’s position to push for regulatory changes that would benefit its own AI ambitions. By aligning with a high-profile partner like Microsoft, G42 can indirectly shape US export control discussions, positioning itself as a key player in the global tech landscape while navigating geopolitical sensitivities. This dynamic illustrates how companies can harness the power of global partnerships to advocate for favourable policy outcomes on the international stage.

Rio Tinto Faces Public Backlash Over Serbian Lithium Mine

Rio Tinto is intensifying efforts to win public support for a $2.4 billion lithium mine project in Serbia amid significant opposition and environmental concerns. The proposed mine, set to become one of Europe's largest lithium suppliers for electric vehicle batteries, has the potential to produce 58,000 tonnes of lithium carbonate annually and contribute up to 16% of Serbia's GDP. However, public protests and fears of ecological damage have led to widespread opposition, with recent polls showing two-thirds of Serbians opposing the project. In July 2024, Serbia's Constitutional Court overturned a previous decision that revoked Rio Tinto's mining permits, allowing the project to move forward. However, further governmental approvals and environmental assessments are still required. Despite the government’s optimism regarding the economic benefits and job creation, public sentiment remains largely negative due to concerns over potential contamination of land and water resources.

In response, Rio Tinto has launched a public relations campaign, focusing on transparency and community engagement. The company is emphasising its commitment to environmental safety and addressing what it describes as a 'well-organised disinformation campaign.' CEO Jakob Stausholm has reassured the public of Rio Tinto’s adherence to environmental standards. Meanwhile, Serbian officials, including President Aleksandar Vučić, are in talks with local communities to address concerns. For corporate affairs leaders, Rio Tinto’s challenge highlights the importance of stakeholder engagement and transparent communication in overcoming public opposition to new business opportunities, ensuring that growth and investment align with community and environmental expectations.

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Aligning Research and Development with Public Affairs

In a business environment characterised by rapid technology development and an increasingly complex regulatory landscape, a collaboration between public affairs and R&D becomes essential. This significantly enhances a company’s capacity to innovate within a supportive regulatory framework, secure public funding for research, and engage effectively with policymakers. In this article, I’ll explore how public affairs leaders can work with R&D teams to support the work of both functions. I’ll also highlight the benefits of this collaboration and outline what leaders can do to strengthen innovation and influence.

A Collaboration of Innovation and Influence

To appreciate how public affairs and R&D teams can work together, it's important to understand the distinct yet interconnected roles these functions play within a company.

• Public Affairs – Navigating the Policy Landscape: Public affairs acts as a company’s voice in the policy sphere, striving to create a favourable external environment that facilitates growth and operational success. Leaders are tasked with managing key relationship, where the primary focus is on influencing public policy and regulatory decisions to favour the company’s interests. This includes lobbying for legislative and regulatory environments that support the company’s objectives, building and maintaining relationships with key stakeholders, including policymakers, industry associations, and the broader public, and keeping up-to-date on legislative and regulatory developments that could impact the organisation.
• Research and Development – Driving Innovation: R&D is the engine of innovation within a company, and is the cornerstone of a company’s future success. It relies on creativity, scientific research, and technological advancement to propel an organisation forward. R&D teams are responsible for developing new products, services, or processes that enhance the company’s competitive edge, with a focus on creating innovative solutions that meet market needs and drive organisational growth. This also involves research to support the development of new technologies, and ensuring that new products or services comply with relevant standards and regulation.

While public affairs operates at the intersection of business and policy, and R&D focuses on the generation of new ideas and products, their roles are certainly complementary. Public affairs can provide R&D with insights into the evolving policyscape, helping to navigate challenges in product development and market entry. At the same time, breakthroughs and innovations from R&D can inform public affairs strategies, showcasing a company’s contributions to technologically driven economies. By aligning their efforts, public affairs and R&D teams can support their companies to not only comply with current regulations but also actively shape regulatory and policy environments to support innovation and growth.

How Public Affairs and R&D can Collaborate

The collaboration between public affairs and R&D creates an opportunity for companies to enhance their competitive edge. This is particularly important in industries where regulatory compliance directly impacts the feasibility and success of new technologies.

Innovation often pushes the boundaries of existing regulatory frameworks. Public affairs can play a key role in advocating for regulatory changes that accommodate new technologies or methodologies, ensuring that regulations keep pace with innovation. Public affairs leaders can also provide R&D teams with insights into regulatory trends and upcoming changes, allowing the R&D function to anticipate and integrate compliance considerations early in the development process. Taking this further, public affairs teams can influence policymaking processes to create a more favourable environment for innovation. By engaging in policy advocacy, they can work to shape policies that support research and development efforts, such as intellectual property rights protection, R&D tax incentives, and science and technology education. These efforts not only benefit a company but can also contribute to the broader innovation ecosystem.

Collaboration between public affairs and R&D also facilitates more informed strategic planning and risk management. By understanding the potential challenges, R&D can better navigate the innovation process, while public affairs can develop more targeted advocacy and engagement strategies based on the R&D function's pipeline and priorities. Many governments and public institutions also offer grants, tax incentives, or other forms of support for research and development activities, especially in sectors considered critical for economic development. Public affairs teams can help identify and secure funding opportunities, leveraging their understanding of public policy and their relationships with governmental bodies. This external funding can significantly enhance a company’s ability to invest in R&D initiatives.

Finally, innovations, especially disruptive ones, can sometimes lead to public scrutiny or concern. Public affairs can manage stakeholder expectations and engage with the public to build support for new technologies. By communicating the benefits of innovation and addressing potential concerns, public affairs leaders pave the way for smoother product launches and market acceptance.

The Benefits of Collaboration

A collaboration between public affairs and R&D extends beyond compliance. A strategic partnership enhances an organisation’s innovation capacity and regulatory agility, while also supporting market access to improve a company’s overall competitive position.

Optimised Investment and Resource Allocation: Public affairs teams can identify and secure public funding opportunities, grants, and incentives for R&D projects, optimising a company’s investment in innovation. By aligning R&D projects with current policy priorities and public interests, companies can ensure that their research investments are strategically positioned to receive public and governmental support.

Accelerated Innovation Pipeline: Public affairs can provide R&D with early insights into regulatory changes and trends, enabling the R&D team to anticipate future compliance requirements and integrate these considerations into the innovation process. This proactive approach can significantly shorten the time from concept to market, accelerating the innovation pipeline. By advocating for policies that support research, innovation, and technology development, public affairs can help create a more conducive environment for R&D initiatives, potentially accelerating product development cycles and reducing barriers to innovation.

Enhanced Market Access and Acceptance: Collaboration ensures that new products or technologies are designed with regulatory requirements in mind, facilitating smoother regulatory approval processes and quicker market access. Public affairs can leverage R&D insights to craft compelling narratives around a company’s innovations, building public support and acceptance for new technologies. This is especially important for disruptive innovations that may face initial scepticism or resistance.

Strengthened Stakeholder Relationships: A collaboration allows public affairs to engage with policymakers, regulators, and other stakeholders more effectively, armed with detailed knowledge about the company’s R&D activities and innovation. This informed engagement can strengthen relationships and build allies in the policy space. Public affairs teams can also help to position their company as a leader in innovation within its industry by highlighting R&D achievements. This enhances reputation and stakeholder trust.

Risk Management and Compliance: A partnership allows for early identification and mitigation of potential regulatory risks associated with new products or technologies, reducing the likelihood of costly compliance issues or product recalls. Combining public affairs’ understanding of the policyscape with R&D’s technical knowledge enables a more comprehensive assessment of risks and opportunities, supporting more informed decision-making.

Altogether, a partnership not only supports a company’s immediate operational needs but also contributes to its long-term strategic positioning and success in the market. By leveraging the combined strengths of public affairs and R&D, companies can drive innovation forward and achieve a competitive advantage through policy engagement.

Strategies for Effective Collaboration

To support an effective collaboration between public affairs and R&D, companies must develop a deliberate strategy that aligns objectives, enhances communication and encourages joint initiatives. This can bridge the gap between policy influence and innovation, ensuring that both functions contribute optimally to the organisation’s goals.

Establish Shared Goals and Objectives: Common goals ensures that all parties are working towards the same outcomes, which help to focus collaborative efforts.

• Joint Strategic Planning: Initiate joint strategic planning sessions where public affairs and R&D teams can align on common goals that support their company’s broader strategic objectives. This ensures that efforts in innovation and policy advocacy are mutually reinforcing.
• Cross-Functional Teams: Create cross-functional teams for projects that require input from both public affairs and R&D. Shared projects can help focus both teams on common objectives, fostering a sense of shared purpose and collaboration.

Enhance Communication and Information Sharing: Open and transparent communication promotes trust, reduces misunderstandings, and ensures that everyone has access to the information necessary for informed decision-making.

• Cross-Departmental Meetings: Schedule frequent meetings to facilitate ongoing communication between both teams. Use these meetings to share updates, discuss emerging policy and regulatory developments, and coordinate on innovation.
• Centralised Information: Develop a centralised platform where both teams can access and share relevant information, including policy documents, regulatory updates, research findings, and project statuses. This ensures both teams are working with the latest information and can quickly adapt to changes.

Coordinate on Policy Advocacy and Innovation Promotion: Coordination on advocacy and innovation amplifies the impact of efforts and ensures consistency in messaging.

• Coordinated Messaging: Collaborate on developing key messages that communicate the value and potential of your company’s innovations to policymakers, regulators, and the public. Ensuring consistent messaging reinforces an organisation’s position as a leader in innovation.
• Strategic Engagement with Policymakers: Coordinate efforts to engage with policymakers and regulators to advocate for policies that support innovation and address potential regulatory challenges facing new technologies.

Engage Leadership and Secure Organisational Support: Leadership buy-in and organisational support ensure that collaborative efforts are well-resourced, prioritised, and positioned for long-term success.

• Executive Sponsorship: Secure support and sponsorship from senior leadership for the collaborative efforts between public affairs and R&D. Leadership endorsement emphasises the strategic importance of collaboration and can help allocate necessary resources.
• Promote a Culture of Collaboration: Advocate for a culture that values and promotes collaboration across functions. Leadership can play a key role in modelling collaborative behaviour and reinforcing the benefits of integrated innovation and policy strategies.

Implementing this approach requires commitment and ongoing effort but can significantly enhance an organisation's capacity to engage effectively. By fostering a collaborative partnership between public affairs and R&D, companies can leverage a comprehensive approach to innovation strategic policy engagement.

Challenges and Solutions

Integrating the efforts of public affairs and R&D into a cohesive collaboration presents several challenges. These can range from differences in operational culture and communication styles to the alignment of timelines and objectives.

Challenge 1 – Cultural and Operational Differences: Public affairs and R&D may have fundamentally different operational cultures and mindsets. R&D is typically focused on innovation and exploration, while public affairs deals with policy, narratives and stakeholder relationships.

• Solution: Organise workshops that allow members from both functions to share insights into their work processes, challenges, and success stories. This can foster mutual understanding. Starting with smaller, less complex projects can help both teams learn to work together, gradually building up to more significant initiatives as they develop a more cohesive working relationship.

Challenge 2 – Communication Gaps: Effective communication between public affairs and R&D can be hindered by jargon, differing priorities, and the complexity of explaining technical information to non-specialists.

• Solution: Appoint dedicated liaison officers within each department to facilitate communication and ensure that information is accurately and effectively shared. Also establish clear and regular communication channels, such as joint meetings, where updates and information can be easily exchanged.

Challenge 3 – Aligning Timelines and Objectives: The fast-paced nature of policy changes and the long timelines often associated with R&D projects can make it difficult to align objectives and timelines.

• Solution: Conduct integrated planning sessions to align on timelines, milestones, and objectives, taking into account the different paces at which public affairs and R&D operate. Adopt flexible project management approaches that can accommodate the dynamic nature of policy environments and the iterative process of R&D, allowing for adjustments as projects progress.

Challenge 4 – Resource Allocation: Competing for limited resources can create tension between departments, potentially undermining collaborative efforts.

• Solution: Engage in joint resource planning to identify and prioritise shared needs and objectives. This collaborative approach to resource allocation can help ensure that projects with the highest strategic value are adequately supported. Establish shared budgets for projects that require joint efforts, reinforcing the commitment to collaboration and ensuring that necessary resources are available.

Challenge 5 – Demonstrating Value and Securing Buy-In: Demonstrating the value of collaboration between public affairs and R&D to stakeholders within a company, especially when results may not be immediately visible.

• Solution: Develop metrics for success and regularly report on the achievements and progress of collaborative efforts to demonstrate value and secure ongoing buy-in from leadership and other stakeholders. Also highlight and communicate success stories of effective collaboration efforts, showing tangible benefits and outcomes.

While challenges to effective collaboration between public affairs and R&D are inherent, they are not insurmountable. By addressing these challenges proactively, public affairs and R&D can unlock synergies that enhance a company’s innovation capacity and policy influence, driving long-term success in an increasingly regulated world.

Strengthening Innovation and Influence

Adopting practices to support the collaboration between public affairs and R&D can significantly enhance a company’s innovation capabilities and its ability to influence public policy. This leverages the unique strengths and insights of each function to drive success.

• Establish a Joint Innovation and Policy Agenda: Develop a joint agenda that aligns R&D goals with public policy objectives. This agenda should reflect your company’s strategic priorities and outline how collaborative efforts can address both market opportunities and regulatory demands. Schedule periodic reviews of the joint agenda to adjust priorities and strategies in response to emerging trends, regulatory changes, and feedback.
• Communication and Knowledge Sharing: Organise regular workshops where R&D can share details about ongoing projects and emerging technologies, while public affairs leaders can provide updates on policy developments and advocacy efforts. These sessions encourage mutual learning and inform collaborative strategies. Use dedicated platforms for knowledge sharing between public affairs and R&D teams. These platforms can host updates on regulatory developments, innovation pipelines, and strategic insights.
• Integrate Public Affairs Insights into R&D Processes: Incorporate public affairs insights into the early stages of R&D projects to assess regulatory feasibility and policy implications. This integration can guide project selection and design to ensure alignment with regulatory risks and opportunities. Leverage public affairs expertise to engage with regulatory bodies during the development process, seeking guidance and building supportive relationships that can facilitate smoother approval processes for new innovations.
• Leverage R&D Innovations in Policy Advocacy: Use R&D’s innovations as key elements in policy advocacy efforts, showcasing your company’s contributions to technological, social, and economic development. These demonstrations can support public affairs teams in lobbying for favourable policies and regulations. Use data and findings from R&D projects to support evidence-based advocacy, providing tangible examples of how proposed policies or regulations could impact innovation and industry progress.
• Collaborative Stakeholder Engagement: Conduct joint stakeholder mapping exercises to identify key stakeholders at the intersection of policy and innovation, including regulatory bodies, industry partners, and advocacy groups. Develop strategies for engaging with these stakeholders, ensuring consistent messaging and coordinated efforts that reflect both the innovation goals of R&D and the policy objectives of public affairs.

By implementing these practices, companies can ensure that their innovative capabilities are maximised while also shaping the regulatory and policy environment to support their strategic goals. This synergy not only enhances a company’s ability to bring new products and services to market but also strengthens its position as a leader in driving forward-looking policies that support innovation and development.

Conclusion

A collaboration between public affairs and R&D reflects the synergy of innovation and influence. By aligning the expertise of R&D teams with an understanding of the policyscape, companies can accelerate their innovation pipelines, achieve regulatory agility, and influence the development of policies that support growth. As companies continue to grapple with the challenges and opportunities presented by rapidly evolving technology and policy landscapes, the collaboration between these two functions will play a key role in shaping a future where innovation thrives within a supportive policy framework.

Leadership Takeaways

• Aligning public affairs with R&D strengthens innovation by creating a supportive regulatory framework that accelerates product development.
• Public affairs can provide R&D with early insights into evolving regulations, enabling the innovation process to account for compliance from the outset.
• Shared goals between public affairs and R&D ensure that innovation efforts align with broader business strategies, maximising both policy influence and market success.
• Public affairs teams can advocate for regulatory changes that support new technologies, helping R&D overcome barriers and integrate innovation within compliant frameworks.
• Collaboration ensures that products are designed with regulations in mind, speeding up approval processes and ensuring faster entry to market.
• Public affairs can identify and secure public funding opportunities, optimising investments in R&D and aligning projects with public and governmental interests.
• Informed by R&D advancements, public affairs can engage more effectively with policymakers and stakeholders, building stronger alliances and support.
• By aligning with public affairs, R&D can better anticipate regulatory challenges, reducing compliance risks and preventing costly product recalls.
• Public affairs can communicate the benefits of disruptive innovations to the public, smoothing market acceptance and managing potential concerns.
• Coordinating public affairs insights with R&D innovations helps create a favourable policy environment that promotes long-term technological advancement.
• Bridging operational differences between public affairs and R&D fosters a culture of collaboration, leading to a more cohesive approach to innovation and policy engagement.
• Coordinating communications ensures that both functions present a consistent narrative to policymakers, regulators, and the public, enhancing a company’s influence.
• Securing executive support for cross-functional collaboration between public affairs and R&D guarantees the necessary resources and prioritisation for success.
• By aligning R&D’s technical expertise with public affairs’ policy insight, companies can drive innovation while actively shaping a regulatory landscape that supports future growth.

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