IR communications post-Brexit
Know who is buying and selling – and why – says Iyan Adewuya, head of corporate solutions at Bloomberg:
‘IROs’ most important role during this kind of turbulent market is their market-monitoring role. It will be important for IROs to have a very comprehensive view of what is happening in the financial markets across different asset classes, and be able to help senior management separate key signals from all the noise in the markets. Now – perhaps more than ever – the IRO will need to be the eyes and ears of senior management in financial markets.
‘It will not be enough to just monitor who is buying or selling your stock, though. It will be more important to understand why certain investors are buying and selling your stock. It’s likely many investors may have (at least in the near term) a flight-to-safety mentality and may be selling a company’s stock despite still believing in the firm’s strategy and growth prospects. It will be important for IROs to size this up for themselves and coherently explain it to the C-suite.
‘Finally, IROs are also going to need to develop more sophisticated approaches to investor targeting in markets that are as uncertain and volatile as this. They’re going to need to learn to target investors based on the fundamental characteristics of the investors’ portfolio, not just on a plain vanilla peer comparison basis.’
The board should take the lead, says Reza Eftekhari, head of the UK market for Morrow Sodali:
‘In light of the outcome of the referendum, we have seen a ‘business as usual’ trend emerging in the investor community. This is unlikely to change until there are signs of political stability in both the UK and Europe. Moving forward, it is important that corporate strategies are not based on hasty decisions that could lead to further uncertainty, and that challenges are met on a day-to-day basis. Any significant or unplanned changes should be communicated effectively to shareholders to maintain investor confidence.
‘In the current climate, the board must take the lead in reviewing existing business plans and company growth strategies with a view to clearly articulating its approach and recommendations to investors.’
Continue to get your investment story out, says John Gollifer, general manager of the UK’s IR Society:
‘It is in times of crisis and market shock that effective communications come into their own. If an IRO can hold the line and continue to get the investment story across to the investment community and assure investors it still makes sense to hold the company’s shares, this can provide much needed stability.
‘The opposite is also true: if IROs take their eye off the ball (to use a Euro 2016 analogy) and lose focus on what they can control and should be able to manage in the short term, the longer-term strategy and objective may be lost. Above all, IROs can serve their company and investors by keeping a cool head and keeping the market on-side through thick and thin. In this situation, communication, taking feedback, staying alert to what is happening around us and retaining credibility are key.
‘This means keeping the communication channels open when others may be distracted and losing the plot. Let’s remember the five Cs of IR: clarity, consistency, credibility, commitment and – importantly – acting as a critical conduit between business and investor, something Professor John Kay reminded us of at the recent IR Society annual conference.’
It’s fine to say you don’t have all the answers yet, says Seth Linden, president of Dukas Linden Public Relations:
‘Whether you’re the CEO of an asset management firm, professional services organization or large corporation, the key is to communicate effectively and clearly with employees, clients and stakeholders. Right now, there is a sense in the UK and the US that there is a void in governmental leadership both globally and domestically, and it’s vital for CEOs and boards to fill that void with strategic and clear communications. Ambiguity in message and directive is not leadership at all.
‘It’s perfectly fine to articulate that all the answers are not apparent yet, but updates in communications must be delivered as answers become available, and responsiveness is vital at all times. Reassurance – if it’s sincere and informed reassurance – is vital.’
Make use of digital, says Stephen Watson, chief executive of CTN Communications:
‘I think it’s imperative companies don’t duck the obligation to communicate, even if they don’t have the answers. Many businesses have sent emails to staff and shareholders in the last few days urging calm and making reassuring noises about ‘business as normal’. But things aren’t normal and there’s an appetite for more information. Employees and investors especially want to see and hear from their leaders.
‘CEOs and chairmen should be taking to the airwaves and digital channels, engaging with their stakeholders and sharing both the knowns and the unknowns. Some of the best CEOs have been in front of the cameras this week, holding interactive town halls and demonstrating what it takes to lead businesses at a time of crisis and change.’