We need to talk about…Woodford

By Paul Wynne
Partner, Newgate Communications

Well, what we really need to talk about is how communication is handled in the circumstances that lead to crisis.

As we are discovering, the flow of information is critical – between provider, its suppliers, the distributors and the regulator. Most importantly, the flow of information to investors so that they understand what is happening and the potential consequences for their investment.

Central to this flow of information is the need for transparency, honesty and empathy. But who drives this and when is the most appropriate time?

For a business in trouble, naturally it will want to protect its employees and future growth, and it may have a hard-won reputation to consider which it would not wish to discard overnight, however we may feel about the situation.

For the industry, there is a danger – perhaps fear – that an event becomes contagious, stoking fear and emotional reactions which further exacerbate the situation.

But for an investor it’s a matter of trust. Unfortunately, in many of these cases, the decision to be economical with information can contribute to frustration and anger for both investors and the media.

Add to that a real-time, highly competitive digital and global media environment and there is a risk that misinformation and back-channel briefings drive the narrative.

So before you disappear down the rabbit hole in a crisis, here are ten steps to better communications during a crisis and managing expectations across the board:

  1. Admit you have an issue that affects stakeholders.
  2. Have a plan. Identify the risks, review and update crisis communications protocols, prepare and practice for all scenarios.
  3. Don’t be afraid to apologise. Expressing humility and empathy for investors and other stakeholders makes you human.
  4. Explain what you are doing to resolve the issue. Have confidence in the facts of the situation and the people and processes that support the business. Gather supporting evidence meticulously. Work closely with all suppliers, as a united voice, to make the plan happen.
  5. Be realistic about timelines.
  6. Work with the media, not against them. Communicate the truth and take time to explain technical aspects to journalists to ensure they can understand the situation and communicate to their audience.
  7. Correct misconceptions reported in the media through proactive engagement with journalists.
  8. Don’t be afraid to go into the detail.
  9. Update stakeholders regularly.
  10. Keep lines of communication open.

In a highly regulated financial market, with governance a priority, and where crises can quickly become politicised, businesses can no longer afford to shut down in a crisis. This simply inflames negative perceptions and makes it very difficult and complex to recover, if at all.

It is far better to stay in control of the narrative by continually seeking to engage with audiences; never forget the important and influential role the media can play in communicating openly and effectively with all stakeholders.

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