With so many unknowns, and no immediate end in sight, companies are scrambling to address the near and long-term effect Covid-19 will have on their businesses. They are having an equally difficult time determining the most appropriate and most efficient way to communicate with shareholders.
While communication tactics will vary, one thing is clear: this is not the time to stonewall, hedge or obfuscate; it is opportune for timely and effective contacts with shareholders. Investors are making tough decisions about which companies to buy, sell and hold. It is the job of investor relations professionals to provide a path for management teams to calm fear and instill shareholder confidence.
It is imperative for investor relations officers to take the lead, establish a sound strategy and run it flawlessly. In a market that is desperate for guidance and answers, and with investors eager to gain an edge, effective investor communications can make all the difference.
In the past, companies have typically been urged to issue news releases only when they have material or near-material news to report. It is the job of investor relations officers to enforce this policy and dissuade management teams from flooding the marketplace with unimportant press releases, in order to ensure that when ‘real’ news is issued, the investment community is paying attention.
Virtual investor relations
With investors in distress, at least temporarily, these rules have been suspended. More frequent distribution of news releases and shareholder letters or updates keep investors informed. It’s also a chance to move ahead of current as well as future questions, to control the narrative and, eventually, allow investors to make informed decisions.
Not surprisingly, the investor relations industry has quickly moved to a virtual investor relations (VIR) model as offices remain closed, business travel is non-existent and working from home has become the new norm. While certain aspects of VIR–including teleconferences, videoconferencing and webinars–have been around for years, traditional investor relations have historically been face–to–face interactions.
The evidence so far shows that VIR, especially videoconference calls, is working better than many could ever have imagined. The quality is great, even from home, and the cost is hard to beat, not to mention the ability to schedule these meetings on the fly.
The question becomes whether investor relations return to the status quo post-COVID-19 or has the function forever changed?
Over the near term, virtual-‘everything’ will dominate the investor relations landscape. Over the long-term, we will likely end up with a hybrid model. In any case, it’s a win-win for companies, investors and the investor relations profession.
Ince’s strategic approach to investor marketing and stakeholder communications offers an integrated suite of advisory, editorial, design and production services, all complemented by our powerful digital platform and our unique communication toolkit.
Our resilience as a business over our 104-year history means that we have learned to adapt to all the changes currently being thrust upon us during this time.
This article was first published on https://www.ince.co.za/new-rules-of-communications/ on 7 May, 2020