Investor Relations Pros Share Communications Tips Amid The COVID-19 Uncertainty
Companies in APAC are grappling with the economic pressures and challenges caused by the spread of coronavirus, or COVID-19, which has been declared as a pandemic by the World Health Organisation on 11 March. Listed companies should communicate clearly to stakeholders and investors, who are paying close attention to business trends and developments, and are anticipating corporate response plans. This is critical given that the earnings season is kicking off in the coming months.
PR Newswire compiled views from investor relations and financial media professionals on how best to communicate during these uncertain times.
Harold Woo, President, Investor Relations Professionals Association Singapore (IRPAS)
COVID-19 has presented new challenges for companies, requiring them to clearly articulate the impact on business operations, and messaging to shareholders on the steps being taken to prepare for the worsening situation.
It makes more sense, for example, to hold virtual Annual General Meetings (AGM) to avoid crowded function rooms that could lead to another cluster infection. However, to do so calls for a review of the Articles of Association, which requires AGMs to be held in a physical location and in Singapore, and a review of the Practice Guidance of the Code of Corporate Governance on whether AGMs can be held virtually, and finally the issue of having a quorum – can one have a quorum in a virtual AGM?
IRPAS recommends an active dialogue on managing Virtual AGMs in the light of advanced technology solutions while meeting the governance requirements. While the technology to allow webcast meetings or vote electronically already exists, there are outstanding issues to be addressed such as the authentication of proxies and ensuring the privacy of the webcast is sufficiently robust. It will be ideal if the authorities can set some guidelines to provide some assurance to companies.
Other areas that require answers from IR practitioners include thinking about cash flow, which is one of the critical issues for the investment community — can the company last if this is a one-year crisis? Other questions include what are the contingency plans for the next six months and 12 months to manage cashflow and what cost-cutting measures must be taken without fundamentally hurting the business?
There will also be pressing and persistent questions on business activity. They include how has the COVID-19 spread affected business activity, and how significant is the drop in business activities. The narrative would cover the near term (before the next results) and prospects in the next few months.
Kay Li, Chief Editor, Greater China, Investing.com
The media will focus on different aspects of a company’s financial report during this pandemic. As we scrutinize financial reports, more attention will be spent on understanding the extent of how the pandemic has impacted businesses, such as how production and operations have been affected by changes to supply chain and cash flow.
Investors need to know how much of the company’s business comes from countries that have been affected most by the pandemic, in order to better understand how the company’s overall performance has been affected.
Besides reading financial reports, investors and media are looking out for the company’s emergency response measures, as well as its market performance. Listed companies should disseminate timely and accurate company information so that concerns from investors can be addressed quickly.
Joanne Wong, Senior Managing Director, Strategic Communications, FTI Consulting
Communications and investor relations professionals need to address and alleviate growing concerns from stakeholders and the investment community by communicating clearly in this rapidly shifting situation. Wong shares six tips on investor communications amid the spread of coronavirus, which were originally published in IR Magazine.
Work from the inside out: In difficult moments such as this, companies need to prioritize timely, quality and consistent communications with employees, vendors and partners. Apart from being an integral component of sound leadership, this will be key in ensuring all of the business fundamentals the investment community values. It will also be a good litmus test – because if your own employees don’t buy into your position, message or initiative, it won’t succeed externally.
Be transparent in communicating near-term challenges: Communicate transparently and candidly about the short-term challenges the company expects to face from operational risks to disruptions in the supply chain or changes in market dynamics. The management team should articulate clearly and to its best ability an assessment of the immediate, material impact of the current situation on the business. Avoid downplaying the impact of short-term disruptions or brushing them off; instead, address the challenges in a clear and transparent way.
Use the opportunity to reinforce the business’ long-term fundamentals: This is also a critical opportunity for leadership to highlight and reinforce the business’ long-term fundamentals, which will support an eventual recovery and deliver long-term value. Refresh the messaging on the strengths of the company, from the value of its key offerings to talent and even investment in innovation.
Communicate solutions and commitment: The assessment of the pandemic’s impact should also include communications around solutions and mitigatory measures that the company has in place. It is important to show the company’s ability and resolve to weather the storm.
Be ready to respond to concerns and uncertainty: Be realistic when communicating your outlook and guidance on the remainder of the financial period and be ready to brace for worst-case scenarios. Stay abreast of the latest developments, consider possible scenarios and be ready to address legitimate concerns and doubts from the investment community.
Think about your communication goals: The interest of your investors will no doubt be weighted toward the business and financial impact of the pandemic. The company would need to demonstrate its commitment to delivering what each stakeholder is looking for. By effectively demonstrating the company’s ability to achieve shared goals and find alignment with its stakeholders during difficult times, the company also makes its case for its ability to create long-term, sustainable value for investors.
Click here to view more earnings press releases
This blog post is written by Kenneth Goh, Senior Marketing Executive at PR Newswire. A former journalist, he relishes keeping track of breaking news as much as telling stories with trends and data. Connect with him via Linkedin.