COVID-19 is having a profound impact on all aspects of the UK economy. It is also changing the rules of corporate communications.
The focus for most listed companies right now is getting their house in order with equity raises, dividend suspensions and executive pay cuts. However, attention will quickly turn to adjusting to the new normal. Key to navigating this successfully will be effective communications.
The communications landscape which CEOs return to post lockdown will be a very different one to that at the start of the year. Companies must adapt.
First, business will be held to account by all audiences like never before. In the same way that the 2008 financial crisis brought greater media scrutiny on the banks and those running the financial system, so the COVID-19 pandemic will bring into focus UK PLC as a whole. Last week more than 140,000 firms took advantage of the Government’s job retention scheme.
The court of public opinion will be quick to judge those companies in which they now hold stakes. Equally, investors who have shown their support in helping strengthen companies’ balance sheets will be closely assessing financial progress. Engaging with employees at what will remain an uncertain time will also be critical. Companies must be ready to articulate their recovery strategy with authority to all audiences.
Secondly, companies’ must adjust to a new way of communicating with their financial audiences. Whilst virtual beers will quickly disappear when the pubs reopen, it looks increasingly likely that virtual meetings, webinars and conference calls are here to stay in the business world. The days of twice-yearly physical results presentations may well be behind us.
CEOs need to adapt their presenting styles for the virtual world whilst retaining the authenticity and personal touch of a face to face meeting. Technical glitches and bad connectivity will be forgiven for now. But investors and analysts’ tolerance for companies that can’t present themselves seamlessly to the market remotely will quickly diminish.
Next, and most importantly, every business will need to be able to tell their COVID-19 restart story. Did it reinforce your existing purpose and stated strategy, or has it been the catalyst to transform your business? Did you do the right thing by society and employees as well as your investors?
The market and the media will be quick to assess the winners and losers and companies must be ready explain and justify their response to the global pandemic.
This will be particularly important in those sectors where there have been high profile business failures such as retail and leisure and those industries that have been at the heart of the media narrative to date such as insurance.
Finally, stakeholder capitalism was top of the agenda at this year’s Davos and Covid-19 has made it mainstream as an issue. Voluntary executive pay cuts and initiatives to help local communities show that business is aware of, if not embracing, its role in society in a time of global crisis. This social contract cannot be broken post-Covid. Issues which were dominating the boardroom agenda earlier in the year like climate change and diversity will quickly re-emerge as economies gear up to grow again. The best companies will communicate not only how they have navigated the pandemic, but also how they continue to grip the big societal issues.
The pandemic is a human tragedy and a major crisis for many businesses. But like any crisis, it also brings an opportunity for companies to reset, not just in terms of strategy, but also in how their company communicates and engages with the capital markets.