CEOs had better stay on their toes if they want to get the most out of their company’s stock price and have investors on their side if things get tough.
The stock market has generally been rising uniformly for some time, but there have been hiccups in some companies’ performance, usually followed by a drop in the stock price.
It isn’t just during tough times that CEOs should make themselves available to investors; it’s never too early to build loyalty so positions are increased. Drops during tough times can be mitigated and a base of friendlier investors can be built.
Investors look at their contact with top executives as critical in making investment decisions, so even conversations with the media can have an impact.
It’s important that CEOs “keep an open dialogue with investors both in good times and bad,” said Doug Hesney, executive vice president at Makovsky, a communications firm with investor relations services. “CEOs can come to embody the company; to show confidence and leadership.”
Indeed, CEOs personify their company’s financial performance and vision.
Hesney feels CEOs should be available at least at earnings time, but the best way to go is with “consistent visibility.”
Investors would like to interact with senior management on average seven times a year, either by email (3.1 times per year), by phone (2.6 times) or in-person (1.3 times), a study by Weber Shandwick found.
And investors pay extra attention to CEO actions during times of financial difficulty (78%), strategic investments or transactions (77%), public image crises (75%) and government scrutiny (75%).
Nearly 4 in 10 investors (38%) say they follow senior leaders of companies on social media, according to Weber Shandwick.
Social media has brought a new venue and experts say it is only going to grow. CEOs who are on social media can be right there at the forefront, communicating with investors that way.
"As capital markets, investor sentiment and the political environment evolve at faster rates, publicly traded companies need to regularly reassess their communications—both the messaging and the strategy—to provide investors continued confidence in the company's strategy and growth potential,” said Liz Cohen, executive vice president at Weber Shandwick.