Modern corporate communications
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Transcript of Modern corporate communications
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Communicating Business Agenda to Investment Community
Sahala Sianipar
Managing Director, Corporate/Financial Practice, Asia Pacific
Burson-Marsteller
Twitter: @ssahala
Singapore, 26 September 2011
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BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Content
Trends in financial communications
Developing financial communications plan
Discussion
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Trends in Financial Communications
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BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Asia Pacific as Global Capital Raising Centers
US$53 Billion raised via IPO in Hong Kong Stock Exchange in 2010 (Financial Times, 2011) Pictures courtesy of www.bloomberg.com
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BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Asia Pacific Companies Influence Global Merger & Acquisition
110.31
35.12 84.07
65.57
37.21
Top Target Countries by Volume 2010 (US$ 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)
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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
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BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Transparency Demand
Picture: www.thedailybeast.com
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BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Real Time and Multiple Channels
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BURSON-MARSTELLER ASIA-PACIFIC EVIDENCE-BASED COMMUNICATIONS
Case Study
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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
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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%
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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
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Developing Credible Financial Communications Plan
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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
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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
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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THANK YOU