Modern corporate communications
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Transcript of Modern corporate communications
Communicating Business Agenda to Investment Community
Sahala Sianipar
Managing Director, Corporate/Financial Practice, Asia Pacific
Burson-Marsteller
Twitter: @ssahala
Singapore, 26 September 2011
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Content
Trends in financial communications
Developing financial communications plan
Discussion
Trends in Financial Communications
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Asia Pacific as Global Capital Raising Centers
US$53 Billion raised via IPO in Hong Kong Stock Exchange in 2010 (Financial Times, 2011) Pictures courtesy of www.bloomberg.com
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Asia Pacific Companies Influence Global Merger & Acquisition
110.31
35.12 84.07
65.57
37.21
Top Target Countries by Volume 2010 (US$ billion) Source: Bloomberg
China Hong Kong Australia Japan US
Bloomberg 2011 M&A Outlook Report: 2010: 8,700+ deals announced worth US$594 billion Highest M&A activity in financial industry Largest deal by Asian company was Bharti Airtel’s purchase of Zain Africa (US$10.7 billion)
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Active Buying by Asia Pacific Companies in 2011
45%
13%
22%
7%
7% 3%
Where active buyers are expected in 2011? Source: Bloomberg Poll (2010)
Asia Pacific
Central Asia
North America
South & Central America
Western Europe
Affrica & Middle East
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Transparency Demand
Picture: www.thedailybeast.com
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Real Time and Multiple Channels
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Case Study
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Rapid Evolution of Issue into Crisis
It is more difficult to plan for a crisis given the changing communications landscape Source: Burson-Marsteller & Penn Schoen Berland Global Crisis Preparedness Survey 2011
50%
37% 35% 31% 29%
25%
Need to respondextremely quickly
Overall challengesof digital
communications
More globalizednature of
communications
Increased publicdemand for
transparency
Increased anti-corporate
sentiment in publicand/or media
Rise of citizenjournalism / social
media (e.g.Facebook, Twitter)
Global
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Asia Pacific Companies Likely to Encounter Crisis
Source: Burson-Marsteller & Penn Schoen Berland Global Crisis Preparedness Survey 2011
59% 61% 55%
Have experienced a crisis
GL
OB
AL
AP
AC
EU
US
LA
TA
M
46%
67%
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Impact of Trends
Understand Asia Pacific, its diverse constituents and influencers as well as operating landscape
Connect the dots – global and locally
Invest to align internal and external communications that support business objectives
Developing Credible Financial Communications Plan
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
“A corporation managed by responsible managers will be a responsible corporation; a corporation managed by irresponsible managers will be an irresponsible corporation. It is individuals who are responsible for what corporations do.”
Harold Burson Founder Chairman, Burson-Marsteller
November 2008
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Financial Communications Plan – An Overview
Define your objectives that are aligned with corporate/business objectives
List core/priority stakeholders and influencers
Develop messages
Identify communications channels
Define monitoring approach & tools
Identify issue or crisis triggers related to your company and industry
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Issues Mapping
Operational
Service quality
Data security
Business partner
Employee relations
Transparency
Business competition
Stakeholders & Influencers
Regulators
Customers
Investment community
Market commentators/analysts
Local community
Traditional media
Bloggers/online influencers
Reputational
Global/local corporate reputation
Product reputation
Stakeholders’ knowledge of the company
Corporate responsibility commitment
Disclosure
Regulatory
Business competition
Environmental compliance
Business permits
Foreign investment
Compliance
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Case Study
Situation Analysis
• A state agency claimed that a major listed bank in Indonesia did not exercise prudent banking when it disbursed loans to several companies
• Loans were fully collateralized and companies were affected by 1997/98 financial crisis, which required debt restructuring
• The report by the state agency also claimed that the bank’s senior management never reported these loans to its shareholders
• The report was leaked to a couple of first-tier local media, which generated headlines even by Jakarta-based international media
• The government launched an investigation and subsequently criminal charges against senior management of the bank
• The bank’s institutional investors were concerned and rating agencies were about to issue updated ratings of the bank’s papers.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Case Study – cont’d
Integrated approach to investor and stakeholder communications
• The bank quickly updated its institutional shareholders on the situation
• The bank pointed to its information memorandum prior to its listing that provided details of the bank’s exposure to the various companies mentioned in the report
• In other words, the bank had been transparent all along and the report did not provide any new information that investors had not known
• The bank assured its key customers of its financial and operational soundness as it had set aside sufficient and conservative provision for those loans
• The bank also reached out to its key controlling shareholders that in turn, provided public backing of the bank’s strategy and its ability to handle the situation
• The bank disseminated regular updates to media (domestic and international), which were tracked by the investment community
• Employees of the bank were regularly updated of the management’s action to address the situation.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Case Study – cont’d
Results
• Whilst the bank’s stock price was down, no major institutional depositors/customers withdrew funds from the bank
• S&P affirmed its ratings of the bank’s papers despite the public controversy in Indonesia
• Institutional investors recognized there could be other motivations from the charges against the bank
• Key shareholders of the bank also publicly spoke in support of the bank.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Case Study (2)
Situation Analysis
• A major Asian telecommunications company that is listed in the New York Stock Exchange was accused of committing irregular derivative transactions
• The allegation was raised by a politician in a parliamentarian hearing involving senior government ministers and chairperson of the capital market supervisory board
• First-tier national and international newswires immediately picked up the story, which became headlines
• Sell-side analysts called the company to seek clarification
• Institutional investors questioned the company’s transparency, risk management and good corporate governance practices
• At the same time, the politician threatened to file a criminal lawsuit against the company.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Case Study (2) – cont’d
Rapid response and integrated approach to investor and stakeholder communications
• The objective of the communications program was to protect the level of stakeholders’ trust on the company
• Core stakeholders included regulators, business customers, shareholders & investors around the globe, and employees
• Company highlighted its disclosure compliance as required by the US Securities Exchange Commission in its regular filings
• Company’s executives reached out and briefed capital market supervisory board, industry regulators, investment community (sell and buy-side analysts, rating agencies), media (domestic and international) and influencers (e.g. think tanks) regarding the company’s derivative policy, which had been instituted and disclosed regularly
• At the same time, the Company issued regular statements via multiple channels (online, website, traditional media) to correct earlier media reports.
BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Case Study (2) – cont’d
Results
• Chairman of the capital market supervisory board issued a statement that cleared the company from the allegation; the chairman also spoke in front of members of the national parliament
• Investors were satisfied with the explanation that the share price did not suffer from major decline
• Third parties such as research analysts and industry commentators published articles in leading local media supportive of the company’s risk management, disclosure and good governance practices.
In Summary
Asia Pacific companies are expected to be more active in regional and international trade & investment
Stakeholders including investors will demand more on good corporate governance, disclosure, and transparency from companies
U – Understand your financial communications goals and stakeholders in Asia Pacific
C – Be able to connect the dots, globally and locally in today’s digital age
I – Be prepared to invest in aligning internal and external communications capability including crisis preparedness and monitoring tools.
THANK YOU