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Investor Relations Communications in Times of a Crisis

After the United Kingdom’s decision to withdraw from the European Union, a shock wave was sent throughout the global financial markets. In times of a crisis, Investor Relations Officers must maintain a steady hand and effectively communicate their company strategy despite market conditions. While investors may reach their own conclusions on how the market may impact an individual company’s performance, IRO’s must do their best to influence this decision and control the messaging around how the market turbulence is or isn’t impacting their company. Devising both short and long term communications goals – while always a good idea – is especially important during times of crisis. Here are a few key questions to consider in formulating your messaging plan:

1. How long is the event expected to last? In the case of the Brexit vote, while a one-day occurrence, the impact of the vote on the markets may be felt for months, or even years to come.

2. How will the event impact your business relative to your peers? Is your business done globally or do you focus on certain regions? In this case, doing a lot of business in the UK will likely have a greater impact on a company’s future performance than those that operate outside of this region.

3. Why (or why not) has your short and long term business strategy changed because of this event? In many macro events and crises, a company’s strategy may not change at all, yet investors become more wary of a company’s performance. It is crucial during times of crisis to clearly explain the company’s strategy and why it has or has not changed from the last time shareholders were updated.

4. How are you communicating answers to the above to your shareholders? While certain crises are worthy of a special shareholder update press release or conference call, bigger macro events like the UK vote may not justify this level of communication. So how else are you going to get your messaging into the hands of your investors? Might it be an opportunity to try new ways of communicating to demonstrate your desire to be as transparent as possible during precarious times?

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