During my business plan presentation in Ottawa in January, I was asked what the biggest source of uncertainty was for the company. I said I was concerned about regulatory changes in the lobbying industry and the unknown impact they would have on our business. This is a very material issue for the whole company because over 40% of our revenue is in the public affairs service.
In the quarter that has lapsed some of the uncertainty around recent government rule changes is beginning to clear. First off, registered lobbyist consultants must know what their regulatory obligations are – and should not take liberties on what they think regulatory changes might require. So for example, while I believe the industry generally complies with the lobby registration act, some consultants have registered casual contacts, non arranged meetings or telephone calls as a precaution as well. This is not only unnecessary but regulators are concerned that it gives the appearance that the amount the lobbying is far greater than it is in reality. Furthermore, the repetition of unnecessary registrations by the same lobbyists could be perceived as indicating some sort of special relationship with a government official that does not exist.
Secondly, thanks to an opinion from the Canadian Bar Association we are confident that a lobbyist’s most basic democratic right to vote or to express our support for a political party through lawn signs or financial donations, are not impeded in any way. Clarity is still required the more one is involved in a campaign. But I think we can infer from what we know that lobbyists would be fine to canvas but would be taking a risk if they were to become a campaign manager and then lobby that elected official if he/she became a minister, or parliamentary secretary.
A third area that has not been discussed much, is the impact the new rules have on indirect lobbying, typically defined as grass root lobbying. The definition of lobbyist in the Lobbyist Registration Act includes activities that attempt to mobilize stakeholders to influence decision makers. By extension, and I am not sure that everyone in the industry has fully realized, grass root lobbyists will not be able to participate in election campaigns. In any case, a new rule circulated by the Prime Minister’s office makes this matter of interpretation moot, as the prime minister is restricting his cabinet and parliamentary secretaries, from using not only registered consultants but non registered consultants who work in lobbying firms from participating in their campaigns.
While these changes seem punitive at first blush to those of us who have enjoyed playing senior roles in campaigns and working on public policy issues from the outside – modern standards of ethical conduct have changed. It is common place in the private sector boards, for example for directors to recuse themselves if they ‘perceive’ they are in a position of conflict on a decision. The lobby registration commissioners’ reliance on the ‘perception’ test is really the same standard of conduct. The prime minister is really just evolving with the times.
So back to the real question, how will these changes to lobby rules affect our business? I believe ethical companies like Hill & Knowlton do not need to rely on insider connections. We will do well because we are thorough and have experienced consultants. We are approaching this regulatory environment like any other business challenge. We have recently asked Elizabeth Roscoe, Deputy Public Affairs Practice Leader, to review our public affairs practice and make recommendations on how we should move forward. Among the issues she will be looking at include:
1) Mix of skills required; are we recruiting the right type of skills for today’s world?
2) Training of existing staff
3) Role of 24/7 digital and traditional media in PA
4) Integration of media, stakeholder relations and PR for GR
5) What is service differentiator in the changing marketplace?
6) How should we be marketing ourselves in the new environment?
7) Issues caused by jurisdictional restraints
Elizabeth’s report will help guide us in our business planning process next fall. I see the environment not as a risk to be feared but as an opportunity to differentiate ourselves from the rest of industry.