Frequently Asked Questions

Governmental relations are - in addition to public relations and investor relations - a third level of a company’s public image. In the European Union, as well as in individual member states, decisions are taken by the legislative and executive bodies on issues which can be existential for a company. It is understandable that a company, in the interest of its shareholders and employees, propagates its own views by way of substantive arguments in the political debate. Contact with policy makers and the early articulation of self-interest is of great importance, especially at the European level. Thus, in some member states lobbying has long been an integral part of corporate strategy. In other member states, however, many companies have shortcomings which should be addressed if they wish to avoid lagging behind their European competitors.

Ultimately, every company depends on the representation of its interests with respect to the legislative and executive bodies. This has equal bearing on all companies and is irrespective of the level at which that company is operating - locally, nationally or internationally. Companies might maintain membership in one or more industrial or sector association expressly for this purpose, have their own liaison offices in Brussels and the capitals of EU member states and, in addition, mandate an external service provider to safeguard their interests with the legislative and executive bodies. Regardless of whether an activity encompasses the legal requirements for products or forms the legal framework of entrepreneurial practice, the points of contact between business and politics are numerous. Legislative or executive decisions can affect a company dramatically; worst case scenarios include huge additional costs, the loss of competitive advantage or market access itself. Political representation opens up a wide spectrum for assessing and responding to the processes in both the legislative and executive bodies early and correctly - for example by providing information to decision makers about the possible consequences and repercussions for a company.

No company can, in the long-term, afford to leave the consideration of its interests in Europe to chance. Effective representation has always been crucial for long-term business success at the national level, and will increasingly be so in the ‘Europe of 27’ after the Treaty of Lisbon. Even if a company is sufficiently well connected in its ‘home member state’, a strong position in one of the 27 member states does not ensure success in a united Europe: the proportion of economic regulations and government decisions which are not at least indirectly based on European law or on the rulings of EU institutions is steadily decreasing. Representatives of all 27 member states participate setting the decisive course in Brussels. With this in mind, the reality is that policy making within a member state has, in recent years, diminished rather than grown. The result is that lobbying today is at least as important in Brussels as it is on a national level.

The Treaty of Lisbon brings many new features to the fundamental European treaties. Many of these features are of great importance for every citizen: one result is that the EU, through the Treaty of Lisbon, has joined the European Convention on Human Rights, another is that the Charter of Fundamental Rights of the EU has become legally binding and there is more participatory democracy (such as the European Citizens' Initiative) at the European level. In addition, the European Parliament is gaining responsibilities: the codecision procedure has become the ordinary legislative procedure. Added to this, there are also numerous institutional changes, such as the introduction of the posts of President of the European Council and High Representative of the Union for Foreign Affairs and Security Policy of the EU. Some of the modifications to the voting procedures will likely be of particular relevance for companies: in addition to the principle of double majority voting in Council, decisions for many sectors, which formerly were governed by the unanimity principle, are now governed by the majority principle under the Treaty of Lisbon - for instance in the case of justice and home affairs, foreign trade and agriculture. A company therefore has only a limited advantage even if it has persuaded its own national government of the correctness of an issue because a single member state in Brussels is easily outvoted. A company with a strong position in its ‘home member state’ may, in Brussels, be relegated to a minority position quickly.

The interests of the members of an association are often greatly divergent. A single company faces the risk that not its specific concerns, but only the lowest common denominator of the interests of all members of the association is communicated. An external service provider can, on the other hand, represent the position of its client exclusively and directly.

Large companies in particular have their own liaison office in Brussels and in other capitals of Europe. However, these offices are not in opposition, but are complementary team players. A company representative is above all the ‘face’ of the company in the political arena: he is the contact person on site who communicates issues of political relevance for corporate strategy both internally and externally. In contrast, external service providers are primarily process partners commissioned to represent the client with political decision makers.