Democracy, but not as we know it: How do organisations operate strategically in an age of fragmentation?
Ipsos and Jericho convened a conversation in July to explore a defining question facing business: how can organisations maintain legitimacy and influence when the political and social settlement around business is fragmenting?
The conversation followed the publication of the Business & Democracy Commission’s report, Navigating Growing Political Pressures and built on a consistent concern emerging from the Commission’s work: organisations are increasingly active in political and policy engagement, but often feel exposed in a system they do not control and struggle to shape.
Businesses are engaging through consultations, trade bodies, stakeholder meetings, public affairs teams and direct dialogue with government. However, this activity does not always translate into better, meaningful outcomes.
This is not simply the product of a difficult political cycle. Electoral shocks, geopolitical instability, technological disruption, supply-chain pressures, institutional fragmentation and changing media consumption appear to have become enduring features of the environment. Business is therefore being asked to navigate political complexity while also responding to citizens, employees and customers whose expectations may be diverse, contradictory and rapidly changing.
This creates a structural tension. Organisations need to make long-term decisions in a system that is becoming more short term. They are being asked to contribute to wider societal challenges while the boundaries of their role remain unclear. They are expected to engage politically, but not become political.
The conversation considered what a more constructive settlement between business, government and society might look like; whether the three can find sufficient common ground to address shared problems; and what capabilities, relationships and forms of leadership businesses will need in order to operate effectively in a less predictable age.
The discussion was held under the Chatham House Rule with a group of communications, public affairs and corporate affairs leaders. The below summarises the key insights and recommendations.
Key Insights
The relationship between business and government is constrained by low trust and defensive incentives. Policymakers can be reluctant to work openly with business for fear of criticism or accusations of favouritism, while companies often assume that government will not fully understand or act on their concerns. Both sides can therefore retreat into familiar positions: government consults without sharing ownership of the problem, while business advocates from the outside rather than entering into a more open process of joint problem-solving. Rebuilding trust will require a clearer understanding of the pressures, motives and constraints operating on both sides.
Complex problems are increasingly communicated through binary political narratives. Participants questioned how businesses can explain difficult trade-offs when public debate rewards simplicity, certainty and conflict more than nuance. This is not simply a communications challenge: it reflects a wider inability to create space in which competing interests, consequences and uncertainties can be considered honestly. Business may need to become more confident in articulating its values and choices, rather than attempting to remove the politics from issues that are inherently political.
Legitimacy is increasingly local and visible. National claims about investment, employment or tax contributions may carry less weight than tangible evidence of what an organisation is doing in a particular community, high street or neighbourhood. People are more likely to judge institutions through what they can see and experience than through abstract statements of national impact. This points towards a more place-based approach, in which business contribution is understood through jobs, skills, local investment and improvements that are meaningful to particular communities.
The UK may be suffering from an absence of a convincing narrative of opportunity. Other political and economic systems were perceived to communicate a clearer sense of direction, while British debate often appears dominated by constraint, decline and the management of risk. A more optimistic narrative cannot simply be imposed through better messaging: it needs to be grounded in credible opportunities that people can see themselves benefiting from. Business has a role in helping to define that story, but it cannot do so alone or without addressing questions of fairness, legitimacy and who gains from change.
Devolution could create more responsive partnerships, but also greater complexity. Stronger local relationships may help business and government address practical problems, although regulatory divergence and unclear divisions of responsibility could make it harder for organisations operating across the UK. Devolution may provide more manageable spaces in which business, political leaders and communities can build trust around shared outcomes. But this will depend on greater clarity about what should be locally determined, what requires national consistency and how businesses should engage across multiple centres of power.
What next?
Progress will require a greater tolerance of risk and failure. Political, media and corporate cultures can all discourage experimentation. Participants argued that meaningful innovation is unlikely unless institutions are given sufficient permission to test, learn and adjust. This does not mean weakening accountability, but distinguishing between negligence and good-faith attempts to do something differently. Without that distinction, both government and business will continue to favour defensible process over better outcomes.
The objective need not be a perfect relationship between business and government. A more realistic ambition may be to reduce friction, improve alignment and build enough trust to make practical cooperation possible. The next step should be to test the assumptions emerging from the business side through interviews and intelligence gathering with political actors, exploring how they understand the relationship, where they see the barriers and what better engagement would require from business. That work could then identify one or two issues ripe for collaboration, creating a pilot through which a more constructive model can be developed, tested and potentially replicated.
A more constructive relationship may begin with a small number of shared problems rather than a comprehensive new settlement. Youth unemployment, energy policy, local investment and the scaling of mid-sized technology businesses were suggested as areas in which collaboration could be tested. The most promising opportunities are likely to be those where public need, political priority and business capability genuinely overlap, and where progress can be made visible. A practical pilot could allow the parties to agree the problem together, test a different way of working and build a model that might then be replicated elsewhere. Each party will need to come to the table with openness, vulnerability and the willingness to seed ground in the name of the common good.
For Further Information please contact: Becky Holloway, Programme Director at becky.holloway@jerichochambers.com