Here is a brief excerpt from an article by Matt Palmquist for strategy+business, published by Strategy&, formerly Booz & Company. To read the complete article, check out others, learn more about the firm, and obtain subscription information, please click here.

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Bottom Line: Issues that crop up in the political and social arenas have become more critical and complex in recent years. To stay ahead of such upheaval, multinational firms should consider elevating external affairs to the same level as other top management spheres.

To become players on the global stage, multinational firms must grapple with numerous thorny issues that transcend the business realm. In recent years, cybercrime, environmental worries, governmental regulation, labor rights in emerging economies, and corporate sustainability have emerged as just a few of the major concerns facing companies whose fortunes are inextricably linked with the vagaries of political and social change.

From coping with the effects of natural disasters to complying with complex legislation such as the Affordable Care Act, many firms tend to tackle each new external issue in a piecemeal manner, according to a new study. Indeed, until now, most large companies have tried to deal with these so-called nonmarket issues by funneling them toward their legislative affairs offices, which work with local and national governments, or to community relations departments, which handle philanthropy, social responsibility efforts, and interactions with nonprofits.

But this approach is proving inadequate for firms that need to respond quickly to potentially game-changing circumstances beyond their direct control. In fact, the authors suggest, the modern era of big business could even call for the introduction of a new type of dedicated executive in the C-level suite—a chief external officer, as they have dubbed the position—to oversee a company’s corporate responsibility efforts, liaise with external agencies and governments, and heighten competitive advantage by responding strategically to periods of sociopolitical uncertainty.

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Here is a direct link to the complete article.

Matt Palmquist is a freelance business journalist based in Oakland, California. To check out his other articles, please click here.