What is already clear is that millions of people around the world will be affected by the crisis both directly and indirectly. Global stock markets have crashed to levels not seen since 1987, and in recent weeks we have seen companies initiating processes to minimise the impact on ‘business as usual’ as much as possible; emergency board meetings have been held and business continuity plans rolled out.
During times of uncertainty, people look for reassurance and things to believe in. Nothing erodes trust quicker than poor and misguided communication. It doesn’t matter who you are or who you are communicating to; whether you are the prime minister addressing the nation, or a parent reassuring your child. Everyone is looking for the same thing; reassurance through timely, honest and authentic information delivered with clarity and explanation.
Corporate communication is no different. Whether it is internally to employees or externally to customers, suppliers and investors, everyone just wants reassurance that the people in charge are doing everything they can to manage the risk and doing it in a responsible way, to hear an honest assessment of what the impacts are likely to be and to be notified as and when things change.
This reporting season sees the first mandatory application of the 2018 UK Corporate Governance Code and the 2018 Miscellaneous Reporting Regulations; the coronavirus outbreak will shine a bright spotlight on how companies implement these regulatory requirements from both a governance and reporting perspective. In combination, these two pieces of new legislation require directors to report for the first time on how they have discharged their duties to promote the success of the company through, inter alia, the consideration of the long-term impact of decision making on multiple stakeholders including specifically employees, customers, suppliers and communities.
The FRC has recently issued specific guidance on coronavirus risk disclosures which will be the trigger for many companies to report on coronavirus in that section, however depending on the extent of the impact, for companies operating in highly affected sectors such as travel, tourism and entertainment, coronavirus will require more extensive discussion throughout the annual report.
From an annual reporting perspective, for companies yet to report for this season, our advice is to think more broadly about how coronavirus affects your report. For example, how has the outbreak affected market trends at a macro and sector specific level? Has it derailed the supply chain? Have you responded by changing your strategy or business model? Have you ramped up your stakeholder engagement and how have you responded to concerns raised? How will you report on Board activity in the governance report? How have they been kept up to date with developments? How will it affect your section 172 statement? As always, only specific, detailed disclosures will provide decision-useful information; generic, boilerplate disclosures add no value and should be avoided.
However, don’t forget that an annual report is only one part of your communications ecosystem. All the components of your communications ecosystem – including your corporate and investor websites, interim report, investor presentations and social channels – must be joined up. Consistency across all channels is key. Your brand also plays a part in all this. Historically seen as a marketing effort, it has evolved to become a lens through which strategic business decisions are made and a platform for action. In turbulent times like these, being able to leverage a strong brand can help you bounce back quicker and contribute to improved performance in the long term.
How your brand behaves now will set you up for success moving forward. Make sure that yours is positioned in the right way, and that you continue to remain relevant to your stakeholders. Embrace the opportunity to look at how you operate, internally and externally. Is it the brand experience you want your stakeholders to have with you? Would you or could you improve it?
If you want to discuss any aspect of your reporting, please get in touch.