Q: My company is under threat from activist investors. Our lawyers want us to stick to a ‘no comment’ policy toward the press. Do you think that’s the right approach to take?
A: Although in such an awkward situation it definitely makes sense to act very cautiously and work closely with your company’s lawyers, this should by no means lead to a petrified communications department. Discussions with activist investors very often have the potential to escalate into a media battle. You will lose such a battle if you simply stick to traditional investor relations and a ‘no comment’ policy.
Activist investors have few obstacles when it comes to agitation and feel comfortable in the public arena. It’s very easy for them to send a ‘bear hug’ letter (a hostile takeover attempt) that attracts a lot of media attention. Companies, on the other hand, have less room to maneuver because they are bound by rules and regulations. It is for that precise reason that it absolutely makes sense to develop a proactive communications policy.
You should directly contact your communications department. If your company doesn’t have active media relations, you had better start building them now: make friends before you need them. It is of the utmost importance that you take the initiative and have control over issues and timing. Think through all possible scenarios – and prepare for every one of them.
When you think it can’t get any worse, it will. Counter misperceptions directly and – if necessary – aggressively, otherwise the rumors of today will become the facts of tomorrow. In the Netherlands people say, ‘Today’s newspapers are tomorrow’s chip wrappers’. This is very shortsighted. They might wrap chips (and even fish) in it, but the people who have read the offending article now have a perception in their heads. It goes without saying that this perception should ideally be positive to your case, so try to influence it with clear and compelling messages.
Of course, everything stated above is valid only when your business is in good shape and when you have a compelling case to make to investors. If not, I guess you know what you should do in that situation.
