Provoke Podcast: Increased Oversight + Affordability Turbulence Ahead

(MENAFN- PRovoke) Tucker Warren, a senior partner at Penta who previously served as communications director for the Financial Crisis Inquiry Commission, sat down with me to discuss the upcoming US midterms, the chances that Democrats will take at least the House, and what an oversight agenda might mean for corporate America.

You can listen to the discussion here (strongly recommended) or read some of the highlights below.

Warren agrees with the consensus that Democrats will likely take the House, with the Senate more of a toss-up. But he cautions:“It's worth noting that that polling has has had a tough go of it over the last decade or so, and it's been difficult to get a real good bead on the Trump voter.

“What we're seeing right now, based on polling, is that there are some red states that were thought to be pretty safe territory for the Republican Party where we're seeing Republicans spend an awful lot of money in the last moment. So that does tend to signal maybe a little bit of last-minute panic, though that doesn't necessarily mean those seats will flip.”

Whether Democrats take the House and the Senate, or just one chamber, they will have very little legislative power-which means that their focus is likely to be on oversight, which has the potential to make life uncomfortable for companies in a number of sectors on a number of issues.

Even if the Democrats control only the House,“the House has a good bit of power. So when we talk about oversight, there is an official House Oversight Committee. That committee has broad latitude to look into a range of different issues. They've got subpoena power. Then you have other committees that have specialization in healthcare or technology or homeland security. Each committee also has the ability to conduct its own oversight investigations.”

Any of those investigations can create real reputation risk.“If you're a company thinking about your risk in this political environment, there are the official hearings and the letters that brands receive that ask them to produce documentation and evidence about how they've conducted their business, and whether they have benefited from regulatory relief.

“But there's also the power of social media, who a number of members of Congress are quite savvy at the Elizabeth Warrens and the AOCs of the world and the Jamie Raskins of the world. So yes, there's the official hearings, but there's also simply just the fact of being on the receiving end of criticism and some kind of evidence and fact pattern that a member of Congress or a committee finds concerning.”

Then the question becomes how much interest does the public take in such issues and what is the broader reputational impact.“I don't think that the general public cares so much about being cozy with the president United States and playing golf with him, I think when they start to care, it's when it actually starts to hit their pocketbook.

“When they start to look at, well, is this something that has impacted what price I'm paying at the pump? Is what I'm seeing here out of this company something that impacts my electric bill? Is this something that's impacting the cost of eggs or beef? When those dots are connected, then I think you're into what I feel is the broader conversation, which is really an affordability crisis that we're dealing with right here in America.”

With increased oversight coming against a backdrop of affordability issues,“I think corporate America writ large is in for a really turbulent few years,” says Warren.“When you look at the economic data right now, people are paying about 30% more than just a few years ago on just about everything they need. Gas is at like 90% more. Mortgages are a little north of 40% more. These are essential elements of the economy that that people are really struggling with, and there are no quick fixes.”

The tech sector is likely to face particularly intense scrutiny, Warren says, with concerns tied to the broader affordability discussion with 65% of Americans fearing that job losses related to AI will effect them personally. That means tech companies need to do a better job of educating lawmakers and the public.

“It's of course incumbent upon those companies for many reasons, for the well-being of the general public as well as to protect their own brands, it's incumbent upon them to spend time here educating those that are regulating them to ensure they understand the technology. Otherwise, you'll just get bad policy outcomes.”

It's important that communications professionals get ahead of the Narrative.“CEOs and their advisors need to know that that the staffs around these policymakers are preparing now. Evidence is getting compiled. Many companies have received letters. Some of those letters have been a bit of a warning shot that you'll be hearing from us on day one. So that preparation should really be now.

“There are a number of CEOs that have high visibility who are very comfortable in hearing environments and have navigated those very well. That said, even the most skilled CEOs have had moments where they've struggled. Some of that is because it is not a fair environment, because evidence is assembled and not necessarily shared with the witness or those representing the witness.

“A narrative is strung together, and then it becomes a performance for members of that committee to land the political points that they want to land. There's a huge performance aspect to the environment, and then there's also just the media environment that has rapidly changed so much in the last few year.

“It used to be that your biggest concern, if you were the head of comms, was that you know your CEO might get a snarky headline. Whereas today, before your CEO even leaves the witness chair, there's something on TikTok that has a tremendous amount of engagement, and that's a whole different ball of wax for a communications team to manage.”

While CEOs will have legal advisors by their side as they testify, they also have to think about the reputational implications.

“Done well, the communications counsel has just as much standing and hearing prep as legal does. It doesn't always go poorly when communications doesn't have the same seat at the table. But I can tell you, when it has gone poorly, I typically point to a witness that has been overly prepared by legal and under prepared by comms.

“Yes, you need to mitigate your risk and appreciate what you can't say in that environment, so you don't open yourself up to exposure. But that's not to say that simply mitigating legal risk means that you will win the hearing. You can not get yourself in legal trouble, but get yourself in a whole lot of communications, reputation trouble.

“Even the best lawyers are not spending their time every day thinking about how narratives travel in today's attention-driven social media environment. That's what communicators do, and that's why it's so important for us to be in the room as well, providing that third leg of the stool of preparation.”

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