Urgent COVID-19 Issues: Stakeholder Communication, Reputation Management and Legal Issues

We are all suddenly grappling with the impacts of Coronoavirus (COVID-19) and the tremendous uncertainty it has injected into daily operations.

Most particularly, we are grappling, in the midst of huge volatility, with how to communicate effectively with the groups who are determinant to the success and longevity of our businesses: shareholders, employees, customers, suppliers, regulators and other stakeholders.

Here are 5 principles that should guide how we manage our interactions with these important audiences and ensure we emerge robust when the impacts of this current disruption finally dissipate.

1. Be honest and authentic in your communications

There is often a temptation in a situation like this to go into communications lockdown, to pull down the shutters because the news is bad and to change the way we communicate. We see companies cancelling regular market update calls with investors, put out announcements with bare bones facts and reduce the frequency of updates for staff.

A key principle of any effective communication is to be as authentic and honest as possible and this is particularly the case in a crisis situation. People respond well to authentic ‘tell it like it is’ communication which outlines the facts you know and the ‘unknown knowns’ clearly and with sufficient detail.

Where the downside case is unclear, investors usually imagine the situation is far worse than it actually is so communicating the downside scenario is often a relief.

2. Don’t blame coronavirus for the impacts if it’s not true

Fund managers we speak to believe many companies, with inherently weak business models, are using Coronavirus as an excuse to mask the real situation. This is a short term and ultimately flawed strategy which will be revealed for what it is in the course of time.

In fact, investors believe the long-term pain for companies which are not up front at the outset will be far greater (think share price reaction, brand damage) than if they had been completely candid up front.

3. Don’t provide false reassurances – at best you will look naïve

Companies coming out early in this cycle providing reassurances that there will be no impact on their business or operations look at best naïve and at worst as if they have no true handle on their businesses or perspective on the situation.

Investors see through this smoke screen quite easily and it breaks down trust. There is an old maxim in crisis management “If it can be known it will be known” – the facts always seem to come out regardless.

4. Don’t ignore your key audiences by focussing only on one group (eg shareholders)

It is important to realise during a time like this that there are a large group of audiences who are vital to the continued success of your business. Often companies overlook the importance of communicating with their own teams during a time of disruption, leading to a loss of morale and of course productivity.
The same applies to other groups like suppliers and customers. There is an abundance of evidence of organsiations actually increasing brand loyalty during a crisis because they communicate in an open and honest way and demonstrate clear plans to address the challenging situation they face.

5. Be prepared NOW! To communicate for any scenario

It’s way too late to be thinking about your crisis communications planning once the situation is upon you.

You should already have systems in place to manage anything that comes up, including having a workable crisis management system that operates simply and can be operated online 24×7. At a minimum this needs to have a clearly defined crisis team; a process to evaluate each situation and implement according to severity; and social and media monitoring ‘listening tools’.

This article was written by Geoff Fowlstone, Principal at Fowlstone Communications.