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Stakeholder Communications in a COVID-19 World

Guidance on how to communicate effectively in a virtual environment and prepare for long-term impacts on business

May 2020

Overnight, COVID-19 upended many business practices, including the way companies interact with their shareholders and other stakeholders. Senior executives, finance leaders, and IR managers quickly put in place new arrangements to meet their reporting obligations and maintain a dialogue with investors. Both are critical for maintaining credibility and preserving valuations in a volatile market.The response to COVID-19 is accelerating communication trends that already were underway, like investor day webcasts, and introducing us all to entirely new experiences, like virtual shareholder meetings.  Tellingly, news articles mentioning “virtual annual meetings” were practically nonexistent in January, but by late April numbered more than 1,200.

Many of these practices could last well beyond the current stay-at-home period and permanently change the way companies interact with their investors.  In the same way that 9/11 changed videoconferencing from a novelty to a mainstay, the coronavirus is likely to make distributed workforces, Zoom meetings, and digital collaboration tools a part of everyday business life.

At the same time, companies and their boards are recognizing that the pandemic is likely to have a lasting effect on business operations and strategy.  They’re evaluating everything from employee health measures and factory-floor configurations to the way they engage with customers and suppliers and execute M&A deals.  These impacts will need to be carefully communicated, too.

Companies are already facing these questions as they prepare their quarterly earnings announcements. Using recent guidance from the SEC, many will provide detailed disclosure about their response to the pandemic and its impact on their financial performance.

While COVID-19 disclosures will be a focus this quarter, they’re also likely to remain an enduring part of company reporting.  The focus however will shift from reporting the immediate impact on earnings to addressing longer-term changes in business strategy, capital spending, workforce arrangements, and technology investments.  Those are challenging issues with potentially far-reaching effects, and companies are only starting to think about them.  Investors will be eager to hear what they have to say in the months ahead.

The impact of COVID-19 will also be a critical issue as companies planning for their 2020 annual reports and proxy statements. Here are some initial questions companies might want to consider once that process gets underway:

  • Will the discussion of our “risk factors” need to be updated in our MD&A?
  • Do we need to refresh certain sections of our reports that have not been updated for some time, such as the board’s approach to risk management, the role of our board risk committee, or the board’s oversight of the enterprise risk function?
  • How should we discuss progress on our ESG priorities, particularly human capital management and climate resilience?
  • How should we present information on our executive compensation programs and awards to our executives?
  • Will additional disclosure be needed on accounting matters, such as asset impairments, fair value measurements, or reporting on the results of operations?
  • We will almost certainly have new safety protocols that will change how our board interacts with management and other executives. How do we properly describe them?
  • How should we discuss our interactions with regulatory and supervisory bodies, which are likely to be very different than in the past?

COVID-19 should not derail good communication practices.  In a crisis often the board’s first impulse is to be cautious, but this is a time for more communication, not less.  Clear, specific language is much better than vague boilerplate wording. Companies that make a good faith effort to keep investors informed during an uncertain time will earn trust and credibility. Those are valuable commodities in a crisis.

Making the most of virtual meetings
Presentation styles and tactics that work in a boardroom may not translate well to the computer screen. Based on our discussions with clients, we have several recommendations to help make virtual investor meetings more effective.

  • Have the CEO lead the call. A virtual call requires the CEO to be more active in managing the meeting. In addition to opening the meeting, reviewing the agenda, and introducing speakers, the CEO should manage transitions between speakers, direct the Q&A by briefly fielding questions then handing them off to a colleague for a more detailed response, and provide strong concluding remarks.
  • Designate clear roles. Investor calls are most effective when everyone knows their role and has specific material to present. This is even more important in a virtual meeting. Officials from key areas like human resources or real estate might be making their first appearance with investors and should be introduced at the start by the CEO.
  • Rehearse, rehearse, and then rehearse again. Today, management teams do not have the benefit of being in the same room, and many people will find it awkward to speak and respond to questions when separated from colleagues. Scripting presentations, and, importantly, transitions between speakers, and holding several team practice sessions will lead to smoother, more professional virtual meetings. Include a tech rehearsal and Q&A practice. Anticipate likely questions, prepare a Q&A document in advance, and identify who should take specific questions.
  • Connect with your audience. Look into or just above the computer camera, especially when speaking, in order to make eye contact with virtual participants. It’s counterintuitive. Most people default to looking at other people on their screen, but this point separates the professionals from the amateurs, and it goes a long way in connecting with viewers. It’s also important to establish a welcoming frame ensuring that the camera is at eye level and is capturing a speaker from the shoulders up with some extra space above the head.
  • Say it clearly and visibly. Sit up straight and speak calmly. Speakers tend to rush when self-awareness kicks in and they know they are being watched. Use natural lighting and/or place a light behind the camera. Strong light sources from behind (backlit) speakers will put the presenters in a shadow and make it difficult for viewers to see their faces.
  • Know the technology.  Make sure all members of the management team know how to use the video or audio conferencing system. Set up a separate chat or text so the team can share notes and tips with each other during the call.  Everyone should test their video and audio connections at least half an hour before the investor call begins.


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