The Corporate Line: How should business navigate the EU referendum?

I was lucky enough to speak on a great panel at a really enjoyable PRCA event last night looking at the views of the PR industry on the EU Referendum. According to the PRCA’s research, 70% of PR agencies who had advised their clients on the issue had counselled for them to remain neutral.

It’s perhaps understandable that the communications industry would urge caution. The EU debate is pretty polarised, involving strong and passionate beliefs on either side. There may be little to gain and a lot to risk with any interventions, particularly for high-profile consumer brands.

The Scottish Referendum in 2014 showed just how difficult these issues can be for business. A large number of big companies were recruited by the Better Together campaign to highlight the dangers of separation. However, this was perceived by some to be done in a pushy and threatening way, sparking a backlash at the brands involved. Tunnock’s biscuits, until that point a quiet and quintessentially Scottish brand, faced ferocious criticism for their owners’ strong support of the union. They and others faced calls for boycotts, leading to the creation of a Facebook page, “Boycott the Companies That Scared Scotland”.

Interestingly, it hasn’t always been like this. Wind the clock back to the last referendum on Europe, in 1975, and businesses played a very high-profile and active part of the campaign. Companies like ICI, Barclays, British Steel and W.H. Smith, not to mention Imperial Tobacco, were heavily involved in trying to persuade their workforce and their customers to back staying in the Common Market. The CBI went so far as to ask each of their members to appoint a 'Mr Europe' who would take the case to their staff.

Some were even involved in their own version of Project Fear. British Leyland warned their workers that the business would shrink by 25% if the country voted to exit Europe. As it happened, the country voted to stay and it was British Leyland that disappeared.

This time around, the level of involvement and engagement by business is much reduced. Partly this reflects the sense of risk but it also reveals a more fractured perspective in the business world. In 1975 the CBI reported in their survey of members almost total unanimity in favour of remaining – they could find only 7 of 12,000 members who wanted to leave. Today, whilst there is still a majority of big businesses supportive of the EU, there are around a fifth that advocate withdrawal. Unsurprisingly the CBI is much more reserved, officially taking no position on the referendum, except to reflect the views of its members. Its campaign pack is a set of questions rather than an rally cry - no appointment of 'Mr Europes' this time.

Of course, business also doesn’t equate only to big corporations. Since 1975 the UK has seen a rapid growth in the number of SMEs which massively outnumber their larger cousins. Amongst that business community, the Federation of Small Business reports a fairly even split – 47% for Remain, 41% for Leave.

Political campaigns are also a complex world for businesses to navigate. As Ryanair have discovered, running a fun marketing campaign encouraging pro-EU voters to fly home at a discounted rate can not only provoke anger but also allegations of impropriety. Offering incentives to influence how people vote is in electoral law called ‘Treating’. I think it’s fair to say treating the public is not an accusation anyone has made about Ryanair before.

Finally, you have to question whose interests all these business interventions actually serve, and whether they make any difference. Remain campaigners will have been gratified by the business endorsements they have received, reinforcing their message that economically Britain is better off in. However, the fact that much of their business support comes from huge multi-nationals, such as investment banks like Goldman Sachs and JPMorgan, also provides a headache too. Trust in big business, especially banks, is not quite at the low level of trust in politicians, but it’s close. Too many big business endorsements for Remain risks provoking a backlash, creating the space for the Leave camp to promote a more personal, locally focused, anti-establishment message.

I think last night’s debate, and the PRCA survey, shows the PR industry probably has it about right. Businesses should actively encourage public participation in the referendum but should tread carefully about advocating for one side or the other. Ultimately, overly heavy-handed interventions run the risk of benefitting neither the company nor the campaign.

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