IR Preparedness During Geopolitical Unrest
Dear fellow IROs,
Let’s face it, the last few years have been a masterclass in crisis management, haven't they? From a global pandemic that crippled the economy to supply chain disruptions that paralyzed industry, it seems we’ve been living in a constant state of "unprecedented times" Yet just when we thought we were getting a handle on things, new, more complex challenges have emerged: a return to geopolitics with a lot at stake.
If you’re anything like me, you’ve probably received a call or email from an investor inquiring about your company's involvement in a conflict zone that you barely saw coming. Or you've watched your share price plummet inexplicably, only to find out later that it was because a conflict on the other side of the world was upsetting the entire global market. This is the new reality. Geopolitical unrest is no longer a fringe risk for a few, but a reality for every company, and as investor relations professionals, we are on the front lines.
The question is: are we prepared? My personal experience tells me that your contingency plan for a product recall or data breach, while important, is not enough. The contingency plan for geopolitical unrest is different. This is less about admitting mistakes and more about demonstrating resilience and control in a world that seems increasingly out of control. Our essential task is to be the voice of reason, the source of clarity and the steady hand that guides the company through the storm.
The Two-Fold Impact: When It Hits Home, and When It Hits Everyone When a geopolitical crisis erupts, you will find that your business falls into one of two categories. The way you communicate and the level of urgency required will depend entirely on which camp you are in.
1. The Direct Hit: When Your Company Has Ties to the Region
This is the most obvious and immediate challenge. Your company may have a subsidiary, a production facility, key suppliers or even a significant customer base in a region that is now an area of conflict. The first thing that comes your way is a wave of questions from investors, analysts and the media.
· The "Are you there?" Question: The first question is always, "Do you have a direct commitment?" Investors need to know if you have assets, operations or employees in the country concerned. Transparency is non-negotiable here. You must be prepared to provide a clear, factual overview of your presence and any immediate measures taken to ensure the safety of your employees and assets. I experienced this first-hand when a company I was advising had a small subsidiary in a region that suddenly became unstable. The first few days were all about taking calls, delivering facts and reassuring the market that we had the situation under control.
· The supply chain nightmare: What about a third party supplier? Or a supplier to your supplier? Geopolitical events can trigger a cascading domino effect. If your business depends on raw materials, components or transportation routes that pass through a conflict zone, investors will want to know if you have contingencies in place. Your conversation with investors needs to change quickly from "Are we okay?" to "Here's our plan to keep operations going" This is where you need to know your supply chain intimately and be prepared to discuss it with the market.
· Assets and revenues at risk: This is the tricky part. A conflict can lead to asset impairments, plant closures and direct losses to your company's profits. Your job is to quantify the potential impact as best you can, even if the information is incomplete. I've had to prepare for calls where the CEO had to admit that a plant was out of service and the financial impact was still being assessed. The key is to acknowledge the problem, be honest about the uncertainty and outline a clear path forward — even if that path is to look for alternatives or cut ties with the region.
2. The Indirect Hit: When the Tide Lifts All Boats (Downwards)
This is often the more subtle but equally damaging scenario. Your company may have no direct operational links to a geopolitical flashpoint. No factories, no subsidiaries, no key suppliers. Yet your share price suffers. And why? Because the market is scared and investors' appetite for risk has waned.
· Market contagion: When a major conflict or trade war breaks out, it often triggers a flight to safety. Investors pull their money out of riskier investments, and this also applies to a wide range of equities. Small and medium-sized companies in particular can be disproportionately affected. It feels like you're being penalized for something you have no control over. This isn't about your operational risk, it's about the resilience of your business.
· The "Tell Me Your Story" Challenge: Your job is to re-educate the market and remind them why your business is a sound investment regardless of the external turmoil. At this point, you need to talk about your strong balance sheet, your solid cash flow, your diversified customer base and your ability to weather economic storms. Your narrative needs to shift from growth and opportunity to stability and strength. It's about saying, "Yes, the world is crazy, but our business is ready for the future"
· Industry-specific impact: Even if you are not directly impacted, you may be part of an industry that is indirectly impacted. If you are a shipping company, a conflict on a major waterway will affect your routes and costs. If you are a commodities company, a trade dispute over a key commodity can drive up prices. You need to proactively address these sectoral pressures and show that you are prepared to manage them.
From Turmoil to War: The Evolution of Conversation
A geopolitical crisis is often a quick, unpredictable event. But sometimes it evolves into a long-lasting conflict or a new, permanent state of affairs. When the calls shift from questions about the immediate impact to questions about the long-term strategy, you know the narrative needs to change.
· The short-term "firefighting" phase: In the first few days and weeks, the conversation revolves around facts, impacts and immediate actions. You are in triage mode. Investors need to know that you have the situation under control.
· The long-term "new normal" phase: once the dust settles, even if it’s a dusty, war-torn landscape, the conversation needs to evolve. You can no longer say, "We're assessing the situation" You need to move to a message of adaptation and resilience within a new reality.
The conversation should sound like this: "While the conflict continues to create a difficult environment, we have fully adapted our operations. We have secured alternative supply chains and shifted our resources to other markets. The conflict is a new backdrop, but it has not stopped our long-term strategy. We are now focused on [new strategy/markets] and remain committed to increasing shareholder value through [key performance indicator]." It's about moving from a reactive to a proactive stance and demonstrating that your business can not only survive but thrive in the new world order.
An IRO’s Guideline for Geopolitical Preparedness Based on my experience, here is a simple guide that has worked for me; you may want to have in your pocket the next time the markets face a geopolitical crisis.
Phase 1: The shock (day 1-7)
o Know your facts: Have an immediate internal briefing with your senior management and legal team. Get a clear picture of the direct and indirect threat to your company.
o Be proactive: Prepare a statement for your IR website and social media channels. Don't wait for the phone to ring. Something as simple as "We are monitoring the situation closely and will provide a more detailed update as soon as possible" shows that you are engaged.
o Answer the phone: Do not ghost investors. A short, honest call saying that you are seeking information will build trust.
Phase 2: Uncertainty (Week 2-Month 3)
o Turn the narrative around: Shift the conversation from "the event" to the resilience of your organization. Focus on the strength of your balance sheet, the diversification of your business and the ability to manage supply chain disruptions.
o Utilize internal experts: get your supply chain director, your head of legal and your regional managers on the phone with key investors. Show the market that you have the internal expertise to manage the crisis.
o Create thematic content: Go beyond the standard press release. Publish a blog post or short video about your company's operational agility in the face of macroeconomic challenges.
Phase 3: The new normal (from month 3)
o Acknowledge and move on: In your earnings releases and investor presentations, briefly address the ongoing geopolitical situation in your macroeconomic outlook, but then immediately turn to your long-term strategy and how you are adapting to it.
o Focus on business fundamentals: Re-emphasize your key business drivers, your strategic objectives and your commitment to creating value for your shareholders, and set these against the backdrop of the new reality.
o Update your IR plan: Assume that this new geopolitical reality is here to stay. Adapt your investor messaging, your key messages and your overall IR plan accordingly.
The world is becoming more complex, and so is our work. Being prepared for geopolitical turmoil is no longer a luxury, but a necessity. It’s about being a strategic partner for your management and a trusted source of information for your investors, no matter what’s happening in the world.
Best, Muge
Your fellow IR Enthusiast!
Currently serving as the Director of Investor Relations and Sustainability at Galata Wind Enerji (GWIND.IS), Yücel brings a wealth of experience to the role, having begun her investor relations career in 2008 at Dogus Otomotiv (DOAS.IS). Her expertise in proactive strategies utilizing digital technology and AI, particularly in shareholder targeting, is instrumental in communicating Galata Wind's growth story. Traded on the Istanbul Stock Exchange, Galata Wind operates wind and solar farms in Turkey and is strategically expanding into Europe, targeting a capacity of over 1000 MW by 2030.
Yücel has recently published "The Investor Relations Playbook - Achieving Sustainable Success", a hands-on guidebook on investor relations operations with templates, checklists and how-to guides. The book is available in print in Turkish and in digital form in English.