Governments and regulators are second only to customers in their ability to affect companies’ economic value, according to the results of a recent McKinsey survey,¹ though respondents are divided on whether that effect will be positive or negative. Most executives in developed economies expect external-affairs issues² to decrease operating income; those in the developing world are more likely to expect a boost. Compared with our last survey on these topics, just over a year ago, greater shares of respondents report that their companies are willing to engage with governments and see the value of collaborating with them. Yet whether they hope to mitigate risk or create value, only some 10 percent of all respondents say their companies are frequently able to influence governments or regulators or that those groups seek out and value the companies’ opinions.

This survey asked executives a series of questions about the overall impact of governments and regulators, the ways companies manage those relationships and external affairs in general, and their effectiveness at doing so. Notably, since our last survey on these topics,³ a time that has included economic recovery in much of the world and elections that produced significant change in several countries, executives report that these issues are as important as ever: close to half of all respondents say managing external affairs ranks as one of the top-three priorities on their CEOs’ agendas.