SOME companies have an integrated Investor Relations (IR) approach.
Others have separate teams in the Finance and Communications departments.
Based on my experiences and conversations with my peers, I offer suggestions to improve the process from an Investor Communications point of view, which takes things back to the basics, something that many of us have forgotten.
I hope this will prompt these teams to come together to develop a deeper, coordinated and more sustained focus on Investor Communications.
Seven Reasons For Calling It Investor COMMUNICATIONS!
1. It’s About The Larger Narrative And Messages.
You don’t see the IR and Comms people huddled in the same room for long periods of time. Yes, you have the quarterly and half-yearly reporting cycles. But what is it precisely that needs to be done at these occasions?
It is important that the IR and Comms teams work on the analyst and media briefing scripts and slides together because it is always about the larger narrative and messages that you want to convey rather than that time-slice you’re always fussing about.
This is especially so when the numbers don’t look good.
The headline you give to your media release at these events can be critical. Sure, the analysts and media will provide their own headlines, but it’s nevertheless important to try and set the right tone. While the focus may rest on one particular business unit (that may not be doing well), it’s your job to present a balanced (and positive) assessment of the company as a whole.
And, in this regard, do you have independent channels you can use to get your media release (with the larger narrative and messages) out there in its pristine state, so that neutral observers and shareholders can make up their own minds?
Getting familiar with how search engine optimization (SEO) works is very useful to make this process work.
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2. AGMs Are All About Communications.
When it comes to annual general meetings, who runs the show?
Who integrates the strategic and operational messages you want to convey?
How do you make some of the technical issues that shareholders need to vote on less complex? How often do you engage them outside the AGM windows?
If pivotal issues are coming up for shareholders to decide on, who takes the lead in engaging the institutional and retail shareholders ahead of time? Who do you enlist for help to engage these two groups?
The larger narrative and strategy may be the same, but the messages and tactics need to be adapted for your different investor groups.
What happens when your company has a major impact on the lives of many Singaporeans, and there is constant media attention to the quality of your product or service?
Your AGMs become very challenging events. Shareholders will wear both hats, as investors and customers. At times, issues relating to operational performance will get attention over your larger narrative and messages around financial performance.
You can ask shareholders to prioritise questions on financial performance so that these get addressed first and foremost. You can try to take some of the operational performance issues off-line.
But (and this is the elephant in the room) if the tension between meeting the expectations of a listed company and serving the larger public good cannot be resolved, one way to permanently address this is to delist!
3. Sweat The Small Stuff
These are the things that are most often ignored. Who responds to queries from investors, analysts, and the media?
Very often, it’s shuffled between the IR and Comms people. It would be ideal for it to be jointly drafted and proofed by both (in consultation with Finance, Legal and other relevant departments).
There may be more strategic IR and PR messages to be carried and for the draft to be okayed, when necessary, by the CEO. Some of these responses may merit wider circulation especially if they set right important points of fact or address perception issues.
The same spirit should apply to your investor relations profile on your website. What does it look like? Who maintains it? The Comms people would naturally be responsible for the corporate website and the IR team would usually check that their page(s) on the website are frequently refreshed. But things can fall through the cracks, and investors, analysts and media will complain that your website is dated.
Get your Comms group to be responsible for everything that’s posted on the website no matter the custodian assigned to each section.
Very often, we only get to update the Q&A deck when the quarterly or half-yearly brief is due. It should be regularly refreshed whenever a useful query comes in or prior to a new business venture or new business arrangement being announced. Believe me, this helps when you put together that massive tome ahead of an AGM.
4. Deal With The Leaks
This is the curse that befalls all IR and Comms people.
You may have a major announcement coming up but there are a number of moving parts that still need to be sorted out. Well, the standard practice should be to develop a leak strategy.
What do you say farthest out from the announcement, a week before and a day or two before?
The lines and timings would need to be worked out very closely with your prospective partners. It’s really tough when it gets close to the announcement day, but the emphasis would be on maintaining, as carefully as possible, the credibility of the new partnership.
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5. Get Invested In Your Own Annual Report.
Now let’s turn to your reports. You would already have moved to adding a Sustainability Report. Some of the pioneering firms have already gone into Integrated Reporting.
What is the input of the IR team to the Annual Report?
Do you help draft the messages from the Chairman and CEO?
Do you provide input as to what form(at) the Annual Report should take?
How interactive is your digital copy?
Have you embedded informative, short-form videos?
What case studies and personality profiles (that exemplify your community engagement efforts) have you included?
Have you turned more to the use of infographics to present data and interesting facts?
Have you done away with the tiresome profiles of the Board and Senior Management (when these can easily be found on the corporate website)?
Have you tested the contents with shareholders?
Have you bite-sized the contents for your digital and social media platforms?
I know it bucks the trend, but have you considered producing a (small) number of hard copies that summarize the key messages and data, as part of your community outreach efforts?
The IR team needs to really get invested in their own Annual Report.
6. Investors Want To Be Reassured About Their Future With You.
As part of their obligation to publish a Sustainability Report, listed companies need to conduct a materiality assessment with stakeholders (which should include investors) to gather insight on the importance of specific environmental, social and governance (ESG) issues.
The process helps identify an organisation’s most material issues and it also “uncovers blind spots, verifies focus areas, prioritises issues and determines what’s most actionable for the company”.
It creates a closer alignment between business strategy and sustainable practices. We should push the boundaries a little further to make materiality assessments much more anticipatory, looking at ESG issues on the horizon that could affect a company in 5, 10 or 20 years. The IR team should be intimately involved in this process as the Sustainability Report, just like the Annual Report, are key platforms for Investor Communications.
7. You Need To Be Transparent In A Crisis
Are you involved in Contingency, Emergency and Business Continuity Planning? Are you part of the Crisis Management Team? When it comes to a crisis, how actively are you involved?
The IR team should be clustered with the Comms people. If you don’t already have a Crisis Comms Manual, I strongly recommend that you work with someone to develop this quickly, even as a working draft. There are many possible scenarios where a crisis can have a potential impact on market sentiment, particularly when issues of corporate governance take centre stage.
Whatever is put out through traditional, digital and social media platforms would need to factor in both PR and IR considerations. How would you reassure analysts and investors? What statements would the Board issue as to cause, impact, rectification, resolution and contrition?
Watch out for more articles on Crisis Communications. If you have specific queries, email [email protected]
Patrick Nathan was VP for Corporate Communications at SMRT. Prior to that, he was in government for almost three decades. His assignment at SMRT has given him a unique window view to an organisation going through significant transition with its implementation of major renewal and upgrade programmes.