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PR Departments Increasing Staff and Budgets as Corp. Communications Evolves in an Era of Biz Uncertainty

brand authenticity, brand transparency, CCO, communications budgets, communications compensation, communications department, company reputation, corporate communications, Marketing, Pr, Public relations, senior communications officers, The Conference BoardCommunications Takes Center Stage in Business Strategy, New Study Finds

Growth in corporate communications department budgets, team sizes and leaders’ compensation—as well as the organizational choice of having senior communications officers report directly to the CEO—point to the fact that corporate communications is becoming increasingly critical to strategy execution and business growth, according to newly released research from The Conference Board (TCB).

The new benchmarking report, Corporate Communications Practices: 2016 Edition, is the latest addition to the Corporate Intelligence suite of benchmarking products introduced by TCB to support the peer comparative needs of public companies. In a survey of 45 U.S. public companies, respondents identified the top three responsibilities for corporate communications officers as being oversight of the company’s reputation, providing advice directly to the CEO, and supporting employee relations and engagement.

“The first edition of this benchmarking report establishes an important foundation for understanding the evolving corporate communications function,” said Matteo Tonello, managing director of corporate leadership at TCB and co-author of the report, along with Alex Parkinson, senior researcher and associate director of TCB’s Society for New Communications Research, according to a news release. “Much has been made about the shifting responsibilities of corporate communicators as companies seek to disseminate a clear, consistent message internally and externally, and to infuse their brands with authenticity and transparency. Our survey findings support this notion.”

Corporate Communications and Gender Diversity

The findings also show that corporate communications teams typically outperform other departments on gender diversity both in the rank and file and among the leadership, with shares of female leaders that are a multiple of those found across the C-suite of S&P 500 companies. Across industries, the median number of female professionals in the communications department ranges from eight to nine, with the highest numbers found among companies in the $10 billion to $24.9 billion revenue group (14 women) as well as among companies with 25,000 and more employees (12 women). At the top level of the profession, nearly 60 percent of manufacturing companies and 70 percent of financial services firms have a communications department led by a female executive—by way of comparison, only 14.2 percent of the top five leadership positions at companies in the S&P 500 are held by women.

“As corporations seek to advance gender diversity, they would be well served to look at their corporate communications departments for guidance,” said Parkinson. “The function has shown great strides in improving opportunities for women, not least with regard to leadership roles.”

Other key findings include:

New business uncertainties (ranging from political risks to cyber security) require companies to strengthen their crisis and emergency readiness, while product recalls and government investigations are among the most commonly cited communications challenges of 2014 

In recent years, the corporate communications practice has been adapting to uncertain global economic conditions, changing media models, the advent of big data analytics, and the networked enterprise. When surveyed, senior communications professionals refer to a new range of threats pervading today’s corporate communications messages—including an acceleration of political unrest in the Middle East, the weakness of emerging economies, the exposure to technological attacks to IP and physical business sites, and the impending consequences of climate change. Managing stakeholder relations during product recalls and government investigations, in particular, were often cited by the surveyed professionals as the key communications challenges faced by their companies. Moreover, the complexities of today’s global organizations require corporate communications departments to also look inward and attend to internal communications responsibilities—from employee engagement to the promotion of a cohesive corporate culture.

The budgetary resources of corporate communications departments prove resilient, in response to a more stable business environment and the increased demand for communications services

The majority of companies in the sample did not decrease their corporate communications budget between 2013 and 2014. Since the recession ended, companies have enjoyed a more positive business environment and directed more resources into building strategic initiatives such as corporate communications. Services companies, in particular, have shown a tendency to support the communications team by at least maintaining, but often boosting, department budgets. Following the cutbacks of the 2008 recession, many organizations have replenished the cash reserves in their balance sheet and are infusing some of that cash into communications and stakeholder engagement activities.

Industry professionals are in demand as companies increasingly compete for talent to internalize these competencies and expand the size of their in-house communications teams

Despite the continued need for professional services from advertising firms and public relations agencies, the staffing rates at corporate communications teams suggest companies are also shoring up their own in-house resources in the field. In particular, 61.6 percent of nonfinancial services companies in our sample used their expanded budgetary resources to increase their communications team size and hire new talent, and 30.8 percent reported size increases ranging from 10 to 15 percent. The analysis by company size also revealed that 18.2 percent of the largest group of companies (annual revenue of $25 billion and over) increased their department size by 15 percent or more. Overall, these data show that as companies better appreciate the strategic importance of the communications role and expand its scope, they choose to invest in developing internal capabilities and attracting specialized skills.

Top corporate communications officers are middle-aged, well educated, and well paid  

Despite new communications technology, such as social media and mobile apps, often being considered the purview of the younger generation, data show the continuing importance of a traditional communications background comprising strong analytical and writing skills. Top corporate communications executives remain experienced, well-educated professionals (nearly all hold at least an undergraduate degree, typically with majors in journalism or communications) commanding six-figure salaries.

TCB members can download the report here.

Source: PR Newswire; edited by Richard Carufel

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