Investor Relations in the face of Covid-19

In the middle of every difficulty lies opportunity. – Albert Einstein

2020 ExpectationsGlobally we are experiencing all similar situations in our lives. And yes, this is slightly different than all the prior outbreaks we had, on a health level. It is interesting how in such times all the conspiracy theories come out, and all the prophecies suddenly make sense… But then you also have the stars and planets which astrologically play a big role in our lives. So, if we were to recap the expectations for 2020 that were talked about at the beginning of the year, then we would know that this is a year of transformation. An extremely rough year, where several destructive forces would play a role to bring about a change for the better. But we all know that humans are habitual creatures and we do not like to easily adapt, nor try living outside of our comfort zone.

Yet here we are. We are living days completely different from just a few days even weeks ago, and it is just the beginning of the year. What else could there be you say, well… Again, astrologically speaking Pluto, a planet that travels to a new sign every 11-12 years, has shifted into a new sign on April 5, and even though it is one of the smallest planets, it is one that has the most power on society. Think of 11-12 years ago, what happened that changed the way society does things? Oh wait, that’s 2008/2009. Similarly, expectations of current forces are again directed onto the global financial and economic arena. New fiscal policies, new operating systems, again “too big to fail” scenarios, just this time failure is the better option to make room for new rising stars taking their place in the new order. I could possibly add the change in payment modalities and maybe even the rise of cryptocurrency to these expectations. Key during this time though is, that companies have to be flexible enough to adapt and adopt new changes quickly; agility comes to mind. If you change with your surroundings, you have a chance of survival.

Where we are nowSo, let’s take a look at where we are in the corporate world. Things still get done mostly, as employees work from home. Consumers have learned by now, that all their bank transactions get done even without seeing the bank teller. You shop online and pretty much everything gets delivered to your door at least her in Turkey. You can continue on your development journey and either personally or professionally take classes. Even kids pretty much do not have to go to school, they learn from the comfort of their home, forcing double duty onto working parents. Globally, we can see rippling effects across countries. So, countries that follow try to immediately pursue the directives that have worked.

What has changed for the investor relations professional? In essence, not much really. Working remotely is a given for every IRO and dealing with a crisis is part of the financial communications role we have. However, one thing that has quite an immense impact is the level of personal involvement.

A few months back I wrote an article titled “Dealing with a crisis” where I did mention the challenges IR professionals would be faced with, “In such times of uncertainty and concern, we, as investor relations play a central role. Strategic and crisis-oriented communication is key in facing reality, acknowledging the crisis and supplying professional information. When we do this in a timely manner, it may disperse uncertainty, rebuild corporate reputation and restore confidence in the company.” Further, I mentioned that during such times our horizon expands. “On the one side we are a trust anchor to the expert in the financial community, and on the other side we are the person to rant and rave at, as the retail investor probably just put all the family savings into the company’s stock right before it went plummeting down.” In the same article I also talked about the intrinsic human aspect, “…as extreme situations may arouse acute anxiety and strong emotions, such as fear, anger and aggressiveness. Nothing personal, yet combined with age, sex, ethnicity and personality the perception of the crisis may take different shapes and forms.” As emotions can go haywire, we need to be professionals to deal with everyone during crises. Which is what I committed to paper in another article just in the beginning of this year titled “Investor Relations- Professional or Therapist?”. Here, I laid out the importance our individual financial situation has on our emotions and the effects on our decision-making. “One is unaware, that personal finances even cause stress. The income situation, debts, assets and money management are all part of the financial stress equation. Having insufficient resources may lead to unhealthy thoughts, combined with lack of skills or knowledge may eventually lead to unhealthy financial situation, which in turn may lead to situations outside of one’s control, such as divorce, physical and mental health issues, struggling at work/with own business. All this in turn comes with emotions where the target is not necessarily the investor relations professional, yet they somehow turn out to be in the position of listening to extremely personal matters.”

Isolation and staying saneWhile we, as IROs, are used to dealing with difficult situations and difficult people, dealing with ourselves on a personal level is not something we commonly do. This global pandemic has triggered one of the most primitive emotions in all of us – fear. Coping with fear varies from person to person, although perceived as a “negative” emotion in itself it is intrinsic to save our lives. Fear brings about clusters of different emotions that may make the coping of this issue more difficult. On top of that, social distancing has caused confusion and was interpreted by some as social isolation, hence giving rise to the feeling of loneliness. Interestingly enough, in all the talks I had with retail investors, analyst and even colleagues, I could point to feelings of denial, anger, bargaining, depression, and eventually acceptance. These are also known as the stages of grief, in today’s circumstances probably an explanation to losing one’s free will and self-determination. I am grateful, that I have adopted a lifestyle that makes me flexible enough and acknowledge my personal growth and self-discovery. Usually, the response to fear may let us feel trapped and may sometimes become so intolerable that it may prevent us from taking proper action. In cases where we would need to be compassionate, sympathetic or reassure the caller that the company does everything in line within precautions, we may be ambushed in our own emotions and actually miss dealing with the fear of callers, colleagues and associates.

So, here is my daily routine checklist for working from home during this time. On a work schedule of 7:45 – 16:45, I specifically wanted to point out the times of breaks and things I do to change “scenery”.

Video-Chat: I mentioned before, we like our habits. Being at home, should not change our habits from work. And while we are used to crossing the corridor to speak to a colleague, we should continue on this habit and meet now and again face-to-face. The idea here is not to break off all contact, just the physical. Humans need interaction, and in order to stay sane, current and connected, we need to do this face-to-face. Let’s video-chat.

Crisis Talk: Referring back to my crisis article, the best thing we can do currently as IROs is to be accessible and communicative. Take a proactive position and reach out to your investors, your financial community and let them know all the precautions you, as the company, are taking, what risk measures you have in place, how your financial health looks like, that you are working on several scenarios, yet each minute is so different, that even a short-term announcement for expectations may not hold true the next minute. Do not engage personally into theories or thoughts on what might happen, just state the obvious and remain factual. Crisis communication 101, have your spokesperson make the announcement. We did a video call beginning of April where we reached out to pretty much everyone on our distribution list, we let them know what is happening in Turkey, with our company, what we have in place, how sales and financial expectations would look like for Q1 and Q2 and that we would have to take it day by day.

Personal Anecdote: A funny thing to me was, that retail investors were calling me the first week we had remote access in place, and everyone was talking about the share price and how it dropped and whether the company was going bankrupt. I guess this was the stage of denial and anger, because the week after, pretty much the same callers asked for the company to make announcements on the measures they had in place, that sales were continuing in line with the precautions that had been put into place for everyone’s health, the stage of bargaining, maybe even frustration (depression). Come today, where I have nearly no retail investor calling anymore, the stage of acceptance.

Virtual Non-Deal Roadshows and targeting potential investors: In my November 2019 article on “Steps to Shareholder Targeting and Analysis” I have touched upon the creation of a new targeting list, but I also stated “Finally, your strategy is ready, you have a target investor list, but is your story up to date? Have you designed the messages according to investor type? Trends are changing rapidly today so investor relations need to improve their messages to stay current. […] To date, the role of investor relations was rather reactive by only attending meetings and responding to questions, yet by taking action investor relations can make a difference.” If you think that this is an opportunity and it should be communicated, by all means do so. Aside of the fact, that I pretty much spent 2019 that way, something I have started doing in these times, is making myself available for different regions (shifting my workday according to their time zone). So, I have created my list according to whom I had the most contact with, since they had the most interest (holders and non-holders), I let them know, that I would be available to chat over video or phone (which, by now, is so easily set up, without a middleman).

To resist or to changeThings are already changing. Don’t struggle, adapt. Agile teams and the flexibility they have been teaching us is useful now. Employers, who have always had a traditional view, might see the cost saving aspect of remote access. But is Virtual Conferencing and NDRs going to latch on? They might. It may also just mean that the IRO may have several regions it travels to minimize the time difference. So, an office in New York, in London and Singapore, maybe even Dubai? And the rest is done virtually. Key is, if we want to stay, we need to change with our environment.

Müge Yücel is the head of IR at Doğuş Otomotiv, the auto importer and distributor for VW Group brands in Turkey. She is experienced in governance, risk and compliance, skilled in crisis communication and shareholder engagement & outreach. Further, Yücel has been quite actively sharing her experiences in various panels and workshops across Europe and she is a member of the Board at the Turkish IR Society. She also collects impressions from her extensive travels and shares these on social platforms. According to Institutional Investor's "2019 Emerging EMEA Executive Team", Yücel was awarded with 2nd Best IR professional Title in the automotive industry.