Investors relations best practice under the spotlight
The need for consistent, integrated communication that conveys a clear value proposition was an underlying theme in many of the panel discussions that took place at the Business Day Investor Relations & Strategic Communications conference held at the JSE in Sandton.
The first panel discussion focused on the need for integrated communication in investor relations. Integrated communications can’t take place where there are silos, agreed the panel, which consisted of Grindrod’s group company secretary, Cathie Lewis; Murray & Robert group investor & media executive, Ed Jardim; Greymatter & Finch MD Adriana de Roock and Tiger Brands Group communications & stakeholder manager, Nevashnee Naicker. Rather, there needs to be congruency in the messages being communicated by various departments, including marketing and investor relations, it said.
The panel added that crisis management plans should outline who is responsible for speaking on behalf of the company. But though such plans are drafted with the best of intentions, many of the speakers agreed that they’re never enough when a crisis occurs. Murray & Roberts, for instance, found the biggest challenge during the crisis that followed the M1 Grayston bridge collapse in Johannesburg in 2015 was the limited information available in the first two hours afterwards. Two people died and dozens of others were injured in the incident.
In addition to containing lists of people’s names and what their responsibilities are in advance, a crisis management plan should include a clear disclosure policy, agreement on who can say what and details of the channels they can use, agreed the second panel – consisting of BankServAfrica’s CEO Chris Hamilton and company secretary Shergeran Naidoo as well as former investor relations officer for Telkom SA, Nwabisa Piki – during a panel discussion focusing on how to manage stakeholders in difficult times. Two teams need to be set up: an inward team, to fix the problem, and an outward team that focuses on stakeholder communications and has a central linking component, it said.
Accountability for the message that comes out during a crisis, and ownership of the message, must be taken by leaders of the business, ideally the CEO, said the panel, adding that transparent and honest communication is critical during a crisis.
Social media, it said, is an additional challenge that needs to be managed during times of crisis, particularly as opinions are expressed when there is little factual information to rely on. The challenge for corporates is to refrain from commenting until they have sufficient information and then only to communicate the truth.
Businesses need to communicate in a way that illustrates congruency between what they say and what they do, or they will lose not only trust, but credibility, said Nicola Tyler, founder and CEO of Business Results Group. Quoting Benjamin Franklin, she said it takes many good deeds to build a reputation and only one bad one to ruin it.
David Shapiro, deputy chairman at Sasfin Securities, advised investor relations practitioners not to try to impress investors but rather to be upfront and honest in their communications. He said Berkshire Hathaway is a good example of a company that communicates its results with its shareholders in an understandable manner.
Sipho Pityana, nonexecutive director of AngloGold Ashanti and convenor of Save SA, said business was paying the price for not speaking up earlier about corruption and for calling an end to state capture. “I chair the board of a company whose share price is discounted for the simple reason that we’re domiciled in SA,” he said.
However, business also needs to root out corrupt practices within its own ranks, he said. Businesses can no longer pretend that governance issues are none of their concern. They need to recognise and support civil society structures that champion the collective interest.
The Business Day Investor Relations & Strategic Communications conference was held in association with headline partner Greymatter & Finch, venue partner JSE and the Investor Relations Society of SA.