After the stock market and financial fiascos of the past couple of years, many investors are still extremely reluctant to trust any business with their money. They have shown their lack of faith often by simply not investing, other times by forcing out the CEO’s who mismanaged their money. A BusinessWeek.com article has some sage advice for any company looking to repair its reputation and gain investor trust back.
Still, all agree that companies, innocent and guilty alike, must do more to restore the confidence of investors. Many are already taking first steps, say investors and corporate governance experts. The first order of business, they say, is for companies to upgrade the way they communicate to shareholders. The key is brutal honesty, says Rich Myers, head of the financial communications practice at giant public relations firm Edelman. “Investors no longer have any tolerance for anything other than the candid truth,” he says.
Crisis management pros know that full, and rapid, disclosure is the name of the game. If your crisis prevention plans do not include a way to keep a constant stream of reliable information running to shareholders, then you’re behind the curve.
JB
Jonathan Bernstein
www.bernsteincrisismanagement.com