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Nov 15, 2016

Donald Trump and the future of investor communications

A look at the potential impact of the president-elect on IR

The 2016 US presidential election has taught us that a sure thing is never a sure thing. Similar to Brexit, most experts got it wrong when it came to predicting who would be elected to serve as the 45th president of the United States.

Viewed through a similar lens, I doubt anyone will be spot-on in predicting what president-elect Donald Trump’s policies will mean for the financial markets and, more specifically, the resulting effect on investor communications.

As I see it though, there are four areas that may change under President Trump:

1. Regulation
2. Transparency and disclosure
3. Tone
4. Social media


Likely up for grabs will be certain elements of Sarbanes-Oxley. Overall, I envision that Trump will take a pro-business stance and advocate for looser rules for public companies. For example, as Trump proved unwilling to submit his own personal income tax returns, it is quite possible that CEOs and CFOs will no longer be forced to assure the accuracy of financial reports and disclosures. I also believe the so-called ‘wall’ erected between investment banking and sell-side analysts could go the way of the Berlin Wall. Both of these potential changes, and the communication thereof, will challenge even the most seasoned investor relations professional.

On the plus side for the IR industry is the possibility that Trump will reduce the reporting requirements, and therefore the overall costs, for smaller companies to comply with Sarbanes-Oxley. This scenario would be a boon for the investor relations industry as fewer companies would delist from exchanges or even more would consider a public flotation of shares.

Transparency and disclosure

Transparency has never been a strong suit for Trump. From his multitude of business dealings to his tax returns and his actual net worth, much of what we know about Trump is what he has allowed us to know. And while I doubt many CEOs will do a complete 180-degree turn, there will likely be some companies that will be emboldened to reduce their level of transparency with the argument, ‘If it’s good enough for the president…’ This scenario could present a tremendous challenge for the IR community that has intensely promoted effective transparency and disclosure as a means of maintaining strong shareholder relations.


As the saying goes, ‘It’s not what you say, it’s the way that you say it’. Never has this sentiment rung more true than during the most recent election campaign, throughout which Trump communicated in a tone unlike any presidential candidate in history. This tone, which can only be described as in-your-face and unapologetic, goes against what most would consider civilized, restrained communication. Like it or not, this Trump-like tone has made it into daily interpersonal communications in the US; who’s to say it won’t seep into shareholder communications? I am sure there are plenty of CEOs who would relish the opportunity to dress down an analyst during an earnings conference call – and Trump may have indirectly given him/her license to do so.

Social media

Unlike former vice president Al Gore, who claimed to have invented the internet, I doubt Trump will claim to have invented Twitter (I know this only because it’s not called Trumper). From his bed, often at 3.00 am, Trump was able to broadcast his thoughts and opinions and, more importantly, influence millions of people. There is little doubt Trump’s success in using this important tool has forever changed politics. Similarly, although investor relations has not changed dramatically over the past decade, I believe social media will become an increasingly important tool for investor relations professionals to communicate and influence shareholders.

Hang onto your hats: it’s going to be wild ride!

Jeffrey Goldberger is managing partner at consultancy KCSA Strategic Communications

Jeffrey Goldberger

Jeffrey Goldberger

Managing partner at KCSA Strategic Communications