The Corporate Affairs Divide
Why the gap between organisations that get it and those that don’t is about to get very expensive.
From what I can tell, there has never been more research written about the corporate affairs function than right now.
In the past six months, FleishmanHillard, McKinsey, Korn Ferry, BCG, Gallagher, Heidrick & Struggles, IBM iX and APCO have all published work on the function, its strategic value, its structural challenges, its relationship with AI and its role in an increasingly complex geopolitical environment.
Medianet's December 2025 review of the year in Australian corporate affairs observed: businesses have moved decisively from reacting to immediate crises to proactively managing long-term strategic risk.
That shift – from reactive to proactive, from operational to strategic – is the thread running through every piece of research. But when you read across all of it, the picture is more complicated, and more urgent, than any single report suggests.
The data tells two stories
On the surface, the data looks encouraging.
Korn Ferry’s late 2025 survey of Fortune 500 Chief Communications Officers (CCO) found that more than half now sit on the executive committee. Since 2023, there has been a 17% increase in those reporting directly to the CEO, with base compensation up 12-14%.
But in the same period, the number of Fortune 500 firms with a dedicated CCO fell by 6%. Those roles were absorbed quietly when incumbents moved on, divided among other executives or handed to lower-level managers.
Meanwhile, a broader C-suite contraction is underway. Research from Newsweek found that the average number of direct CEO reports across the Fortune Global 500 declined by 15% between 2022 and 2025.
What is actually happening is not elevation across the board. It is bifurcation.
Two very different functions
The corporate affairs function is splitting into two tiers and the distance between them is growing.
Tier one – elevated and indispensable:
The CCO is in the room when strategy is set
Remit has expanded well beyond traditional communications
Function is turning trust and risk management into competitive advantage (Heidrick & Struggles, January 2026)
Tier two – quietly downgraded:
Role absorbed through attrition when incumbents depart
Function remains busy but lacks structural authority
Operating without the positioning to do what the environment demands
The geopolitical dimension is not optional
My former colleagues at McKinsey published research in October 2025, surveying approximately 900 executives across 77 countries, that makes the stakes of this bifurcation clear.
They identified three forces simultaneously pressuring corporate affairs functions:
Expanding geoeconomic tools – sanctions use has more than tripled since 2019 and export restrictions on critical technologies increased fivefold between 2009 and 2023
Fragmentation of the global operating environment
Escalating geopolitical tensions across multiple regions simultaneously
Their conclusion: companies with strong corporate affairs capabilities are better positioned to navigate these policy shifts, rather than simply be shaped by them.
FleishmanHillard’s Corporate Affairs Trends for 2026 adds two further forces: the collapse of generalised trust, with the Reuters Institute finding trust in news down from 51% to 35% in the UK since 2015; and the fragmentation of audiences and channels, with 46 of the top 50 US news sites now seeing declining traffic.
Marshall Manson’s most pointed observation: in this environment, “sounds true” regularly beats “is true.” Narrative clarity and strategic communications leadership have never mattered more.
The AI visibility risk most organisations haven’t seen yet
There is an AI dimension that most organisations have not yet reckoned with.
Muck Rack’s December 2025 research found that earned media makes up approximately half of all sources cited by AI-driven GPTs in responses about companies and brands. Owned content accounts for a further fifth.
An organisation’s communications strategy is now directly shaping how it is represented in the AI-driven information environment that investors, regulators, journalists and employees use to form their views.
A downgraded communications function is not just a reputational risk. It is an AI visibility risk.
The internal problem is just as serious
Gallagher’s 2026 Employee Communications Report found that 73% of internal communicators want to operate as strategic advisors. Only 18% do.
Nearly half describe their primary function as broadcasting announcements.
Axios HQ found that only 1 in 6 employees feels fully aligned with organisational goals, and that misalignment drove nearly twice as many missed deadlines in 2026 as in 2025.
This is not a skills problem. It is a structural one. Communications teams without genuine executive authority default to execution. They are brought in late, briefed partially and expected to make the result look clean.
The Gallagher research found that teams with a clearly understood strategy are four times more likely to operate as genuine strategic advisors, yet most teams do not have one.
This year, Simpplr research captured the risk precisely: 92% of C-suite executives say they are satisfied with their communications teams, while the function remains structurally constrained. Executive satisfaction and structural adequacy are not the same thing.
BCG’s March 2026 research found that most CCOs are struggling to integrate AI into their operations. The tier-one functions are moving on this.
Functions without structural authority or resources are falling further behind.
The cost of the quiet downgrade
APCO’s 2026 research found that 69% of business leaders have experienced a corporate crisis in the last five years, and 95% expect to face one in the future.
The difference between organisations that manage crises well and those that do not comes down, consistently, to preparation, and preparation requires a function with the authority and positioning to build it.
The organisations quietly absorbing their corporate affairs function into legal, marketing or strategy are betting that it is a cost centre that can be rationalised without consequence. The data suggests otherwise.
What this means
Corporate affairs has spent decades making the case for a seat at the table. Evidence indicates this case is largely won. The irony is that some organisations are quietly dismantling the function at the exact moment the environment has finally made it indispensable.
The organisations that are downgrading it now will not feel the consequences immediately. They will feel them the next time something goes wrong and when the function they need is not there in the form they need it.
The bifurcation is not inevitable. But closing the gap requires deliberate decisions about structure, authority and expectation – not just resources.
The environment has done the work of making the case. The question is whether organisations act before they have to.
Sources
Korn Ferry Chief Communications Officer Survey (December 2025) - Korn Ferry, The Shrinking C-Suite (January 2026) - Newsweek / The Official Board, C-Suite Contraction Analysis (November 2025) - Heidrick & Struggles, Balancing Reputation and Risk (January 2026) - McKinsey, Upgrading Corporate Affairs for a New Geopolitical Era (October 2025) - FleishmanHillard Corporate Affairs Trends for 2026, Marshall Manson (December 2025) - Gallagher 2026 Employee Communications Report - Axios HQ 2026 State of Internal Communication - Simpplr State of Internal Communications 2026 - BCG, Corporate Comms Is Playing Catch Up on AI (March 2026) - Muck Rack Generative Pulse 2025 (December 2025) - Reuters Institute Digital News Report 2025 - APCO 2026 Communications and Leadership Outlook - Medianet, 10 Important Themes That Hit for Corporate Affairs in 2025 (December 2025)
