The Good, the Bad and the Ugly:
Communicating in Difficult Times

by Debbie Carver

Communicating with investors is a challenge at the best of times and these are certainly not the best of times. In fact, the fall of 2008 has been the worst of times for many publicly traded companies. How these companies choose to communicate during this global financial crisis will have a major impact on market perception in the short and medium term as markets recover.

Company representatives may be tempted to bury their heads in the sand and hope everything blows over, but that is an exposed position to be in. Everyone involved in the capital markets is facing volatility, nervousness, a media frenzy of doom and gloom and the internet-fueled rumour mill. This is not the time to bury one's head. This is the time to be proactive, build relationships and communicate with investors, employees, clients and vendors.

Is there such a thing as being too vocal? Remaining too silent can send the message that a company is hiding something, but saying too much can cause the main message to get lost. It's vital to strike an effective balance between how much and how often a company communicates. In order to achieve this balance, executives must determine the company's communication priorities.

Companies should focus on a limited number of key messages and be consistent in all formats of communication, including websites, filings, newsletters and email. Companies should also ensure that all spokespeople are kept up to date and maintain consistency in the message.

Stakeholders need to be reassured in difficult times such as these. Companies need to reiterate their strengths - be it financial backing, experienced leadership, growth opportunities, the sustainability of the organization or security of the investment. It makes sense for companies to provide guidance if possible without making promises or forecasts about aspects of the business that are out of its control.

Companies should balance the good and bad news. Investors recognize the challenges companies face and will respect honesty. It is bold but brave to discuss negative news. Outsiders will gain confidence in the ability of an organization to succeed if they feel company representatives are being straightforward. It is prudent for executives to consider meeting their most important stakeholders face to face at such times. But, most importantly, by dealing with this negative information head on, the executive team maintains control of the message.

Company representatives cannot control third parties such as the media or what is said about them on the internet, but they can control how they react. Keeping informed about what is being said about the company puts representatives in the best position to proactively promote the truth and key messages for addressing specific issues. When faced with rumours or negative news, it is best not to react in haste or try to offer explanations directly to the source, but rather to confront the issues using regular communications channels. It pays off to stick to the high road, focusing on key messages and maintaining credibility at all costs.

This is a more important time than ever for companies to keep all their communications tools up to date, especially corporate websites. Changes and updates should be made quickly. People looking for fast answers, for reassurance or to dispel or prove rumours will often check the company's website. It makes sense to ensure the site is a reliable source of current information.

Companies must communicate through the good, the bad and the ugly times, focusing on their strengths and building long-term relationships. Nobody's alone in this mess. But, a proactive approach to communications during tough times can mean improved relationships, better credibility and better chances of survival and success.