Archive for October, 2012

The Importance of State Trade Associations

October 25, 2012

By Steve Arthur, Vice President

I was surprised recently when, during a meeting with a state consumer protection chief, he remarked that his department receives fewer complaints about companies represented by strong state trade associations. He said he found that those industries with strong state level associations will work proactively with his department to resolve issues before they ever get to an enforcement effort.

The next day, in another meeting in a different state, an Attorney General also mentioned state trade associations without any prompting. In this meeting as well, the Attorney General talked generically about how much better industries seem to be that have state trade associations that work proactively with that Attorney General’s office to find out what issues are percolating and take steps to keep them from becoming a concern to the Consumer Protection unit of the office.

These two unsolicited comments on successive days in two different states highlighted a sometimes overlooked, but very important, component of a successful state government relations program: a network of strong state trade associations. A good state trade association is one of the most valuable allies any state government relations program can have in a state.

A solid state trade association can provide you and your company with support in a number of areas:

  • Solid in-state relationships. A good association will have developed good relationships with elected officials in their states.
  • Effective industry advocacy. They know the industry issues and elected officials will look to them to describe potential impacts of policy proposals.
  • Broad industry representation. By representing both large and small members of your industry, they can speak about the impacts a policy could have on the entire industry rather than allowing policy makers to attack a particular company (yours?) that may not be popular in their state.
  • Local connection. By representing both large national companies as well as smaller home grown companies, the association can put that local face on your industry to make it easier for elected officials to see your company as part of the community, rather than an out of state company.
  • Specific company assistance. With their relationships with tax or regulatory agencies and their intimate knowledge of your industry, they can help you clear up an issue or quickly get to the root of a disagreement between your company and an agency.  If it is the latter, they can help you get to those root issues, so you can then step in to represent your company and build on what they have accomplished.

These state associations often provide benefits that are very valuable to smaller members who may operate only in one state or even one location. These are important functions of trade associations, but I am focusing this discussion on the benefits to companies with a large national presence.

Some GR professionals may believe that Groups meetings can be a substitute for state association membership. I would completely disagree. The points above outline some of the key benefits of a state trade association, but the Groups meetings are just as important. Relationships developed at those meetings are necessary to help brand your individual company in the eyes of legislative leaders and executive branch officials from around the country and there is no more efficient way to do that than at Groups meetings—and the state association can even help you at those meetings.

When you meet an elected official at a Groups meeting, you can immediately create a local connection by mentioning your membership (and active participation) in your state association. The elected official may very well know the staff of the trade association and may recall an issue on which she/he was lobbied by that staff. This can help you pivot to an issue discussion where the official will continue to connect you to that in-state association.

Even with a strong state association and active Groups participation, there will still be times when you need to retain a lobbyist for your company. Either when an issue is big enough that your trade association needs some additional firepower, or when there may be conflicting views among association members that preclude them from taking an active role on one side or the other. That is the nature of a trade association and don’t forget that you will need them for other issues in the future.

If you have already joined your state associations, have you evaluated them recently? The list of services above is a good place to start, but here are a few things to ask about them:

  • What kind of relationships do they have with elected officials?
  • Do elected officials see the association as the “go to” place for information about your industry?
  • Can staff effectively explain your industry issues to those officials?
  • Does the association have a broad membership from your industry or does it rely on a few large members to keep it running?
  • Does it keep members updated about its activities on behalf of its members?
  • Does it reach out for advice on how to respond to particular issues?

Now ask yourself this question:

  • Are you and your industry peers providing the association with the resources necessary to accomplish those goals?

I ask because as social media and other forms of communication have made it much easier for advocacy organizations to raise money and mobilize their grassroots on issues that might harm your industry, many trade associations have seen their membership or dues decline. There are reasons for this, but they need to be addressed. Companies do merge and they don’t expect to continue paying both sets of dues. Our budgets get cut, and that may force dues reductions or even drops in association memberships.

While those cuts are sometimes unavoidable, they can’t go on forever. At some point, a state association is going to start becoming less effective because they simply don’t have the resources to maintain relationships, retain good staff and remain a well recognized force in their state. If that happens, it can take years and years and a lot of money to rebuild an industry’s reputation.

So, as you are putting together your budgets for 2013, make sure you become an advocate for your trade associations when it comes to your budget because they can be one of your most effective advocates in the states. I would urge you to take a look at the dues you have paid to your trade associations over the past five years and whether you have increased your presence in their respective states. If so, it may be time to start looking for ways to increase those dues. The NGOs opposing your industry have almost certainly increased their membership and made their presence in the state capitals known.

Of course, in some cases trade associations might not be strong and you may not believe they can offer you much help. Rather than simply defunding them, I would suggest that you work with your industry colleagues to develop a plan to strengthen that association. Doing so can be time consuming, but it is well worth the effort to ensure you have an effective trade association representing your interests in the states.


Steve Arthur is Vice President and brings more than 20 years of public policy experience in both the public and private sector to his work at at Stateside Associates. Mr. Arthur provides clients with hands on state government relations support from strategic planning and issue management to lobbyist management and direct lobbying. He is one of the leaders of Stateside’s Attorneys General practice, guiding clients through the process of working with, and lobbying, state Attorneys General.

Defending Your Government Affairs Program from Shareholder Petitions

October 11, 2012

By Mark Anderson, Senior Vice President

As Chair of the American Bar Association’s (ABA) Government Affairs Practice Committee, I participated recently in an instructive CLE session addressing shareholder petitions that require the disclosure of political activity. While these petitions are not new phenomena, recent events including the Supreme Court decision in the Citizens United case, have raised the profile of the issue. Because even the prospect of a shareholder petition on political transparency could have a damaging impact on a government affairs program, preparation is the best way to defend against—or even avoid altogether—a shareholder petition.

According to the Conference Board, while the number of shareholder petitions rose dramatically after Citizens United (from 40 in 2010 to over 100 so far in 2012), the success rate between 2011 and 2012 fell from 30 percent to just over 20 percent. The petitions ranged from requiring disclosure to shareholders of certain types of political activity, to more draconian measures such as a cease and desist of all political activities.

A reason for the diminishing return is likely the proactive and effective ways that many companies are now dealing with the petitions, or even acting in advance of a petition. Understanding that corporations have different policies and procedures governing political expenditures such as campaign contributions, there are some common methods by which corporations have effectively dealt with the transparency issue without crippling their government affairs programs. The following are a few tips to help you to be prepared to defend your government affairs program in light of this rise in shareholder petitions.

  1. Understand that there are activist groups that have been advancing this issue. The Center for Political Accountability has a model shareholder petition online and the Corporate Reform Coalition has an “activist toolkit” for use on political transparency issues. Some of these groups are promoting this transparency to stifle political contributions from corporations. First, they compel a company to disclose its contributions, then they can use an issue (often not business-related) supported by a candidate to threaten boycotts or pickets based on a single corporate contribution to that candidate. Therefore, the movement should not be considered an organic uprising of shareholders, but an organized activist effort aimed at your corporation.
  2. It is more difficult to defend a political contribution to a candidate, a stance on legislation, or a membership in one the groups of state and local officials in the absence of information about why it was done. So make guidelines available to your shareholders that outline qualities you support in candidates and policies your corporation supports. For example, you may support candidates that promote a certain tax stance or whose platform supports a more favorable climate for business. If you have outlined that beforehand, you will be better prepared to defend a political contribution and combat the notion that you support every tenet of that candidate’s platform including non-business issues.
  3. Given all of the rhetoric about corporate spending, your shareholders probably think that you are doing many things that you are not, so ask your shareholders what information they would like to have about corporate political spending.
  4. Use the discourse with shareholders as an opportunity to build understanding about the role that government affairs plays within the corporation. By actively engaging, much of the distrust that often builds in the absence of information may dissipate—or even be replaced with an understanding the value that government affairs may add to the corporation and shareholders.

The possibility of a shareholder petition can be a chilling event. However, being prepared to defend your government affairs program can certainly help to alleviate many of the concerns and raise confidence that your program will be able to withstand challenges by activist groups.


Mark Anderson is Senior Vice President working at Stateside Associates managing the Regulatory Services Division. He advises clients on engagement strategy and directs educational and “grasstops” campaigns directed at governors and regulatory officials. Mr. Anderson also has created issue advocacy coalitions and facilitates work group meetings of state and federal stakeholders addressing environmental issues.