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Shareholders are getting a stronger voice 07/07/2009

Posted by Corneel Maes in Uncategorized.
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As the traditional high season of shareholders’ meetings has concluded, it looks like the season was a lot more animated that in previous years. A new trend has kicked off and communications professionals at listed companies better learn and pick up. Nowadays, shareholders want to be heard, they take the floor, as a matter of speech but also quite literally. The obviously respectful consent that until recently marked so many shareholders’ meetings has now turned into critical questioning, deliberate no-voting and in some cases it even escalated into physical violence.  Admittedly, what happened at Fortis in Brussels remains the exception to the rule, but it typically evidences how easily shareholder frustration and disappointment can ecalate into violence. Whether this is entirely attributable to the sophisticated schemes of business lawyers such as Mr. Modrikamen is very much questionable. Fact is that, in the wake of the crisis, there is a lot of underlying negative energy. It all boils down to the broken confidence in companies that until recently were considered as the most secure investments. But confidence has gone.

KBC Bank and Shell are just two examples of companies that recently experienced the impact of lacking confidence from their investor base. Shell Directors were denied their bonus as the company had not reached its 2008 target. Who would have ever thought that just 2 years ago, shareholders would vote against a bonus? They wouldn’t even dare… KBC learned a hard lesson when they missed warning their shareholders’ meeting about upcoming bad news. Two weeks after the shareholders’ meeting the news came out and Euronext saw the most spectacular share price drop in its history.

The big challenge for corporate communications and investor relations professionals is to restore confidence and that is easier said than done. The world has changed and investors have grown to be more explicit, more outspoken, more conscious and concerned about the risks of their investment. Even if the audience is very fragmented, they all have one common concern: learn how to trust again. It will take time, lots of time and efforts as serious damage has been done.

I tell you, the communications profession has to learn from experience and face up to the new reality. I see three major objectives for any senior PR and IR professional:
1) earn confidence again
2) be capable of meeting with the audiences, including institutional investors, where they meet and communicate amongst eachother: at blogs, in media article comments, on Facebook and Twitter
3) succeed in driving senior leadership into the world of social media with its  new, different communication techniques

In many perspectives, the third challenge will by far prove to be the most diffricult one. Coaching of senior management will become a major “asset” for today’s PR and IR people. Investors and other stakeholders have found their way into the new channels and the corporate world will have to follow. If we, communciations professionals, fail to lead our Senior Leadership into the new world of social media, we may eventually face a disconnect with our audiences.  Using the new media or at the very least being aware of them, is what we owe our shareholders, our customers, our employees.

Have you tweeted your company’s financial results? Do you have a web place that aggregates all relevant news about your company in one single screen? Do you have an on-line facility that allows investors to ask questions in real time? Can you easily track what is being said and written about your company, about your brands, about your performance out there on the internet? Do you really want to know? Well, I can show you how.

Controllers in the Board Room 25/06/2009

Posted by Corneel Maes in Uncategorized.
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The worldwide crisis in the financial services industry is leading to quite creative proposals being tabled. The Belgian Banking Commission and National Bank claim they need to get a seat at certain Board Room meetings of the major banks, insurance companies and clearing house in Belgium. And they need to be able to say their say in the strategy of these institutions.
Admittedly, the financial crisis has in a very confrontational manner shown that banks all over the world had been playing with fire for too long. They got burned all right, but beyond themselves they also injured way too many people who trusted them, from their clients and employees all the way to their shareholders. Admittedly, this has to be prevented from happening again. We all need to learn from our mistakes, and so do bankers. But will more piles of regulation, crafted and redrafted by laywers and financial wizards, prove to do the trick? And how will genuine competition between financial institutions be guaranteed if the Banking Commission involves itself in all of their respective strategies? This one seems a bridge too far.
Banks urgently need to restore and even more so earn the confidence of their clients, their shareholders, their employees. Corporate Governance in the financial services industry will eventually move into a new dimension. With control systems and flashing lights that are sharp and sensitive, with early warning signals that pre-empt major risks much earlier.
But above all, Board Rooms and Executive Committees must ensure that they have the right profiles and skills on board. Independent directors and external controllers are great; what the financial services industry now needs most is experienced bankers in the driver’s seat, people who in their professional career have proven to be knowledgeable and ethical. No compromise there. That will eventually bring more credibility to the system than additional layers of control from the outside.
Maybe here’s a lesson to think about: Haven’t we all been good students in our younger lives, bahaving properly and disciplined when the teacher was around? But oh boy, as soon as the teacher turned his back – what a difference, what an excitement to cross the line. It’s part of human nature, full stop. Would you really think that adults, even bankers aren’t humans?

CSR – what’s in a name? 16/06/2009

Posted by Corneel Maes in Uncategorized.
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Any company – big or small – has a responsibility to its stakeholders, by virtue of participating in the socio-economic society in which it is doing business. Corporate Social Responsibility emerged in the late nineties from Boardroom vision and conviction that companies must give back to the community. CSR has since become a ‘must-have’ for the average company and organization. Unfortunately, the notion of CSR has been used and abused in such a multitude of instances that the essence of what it actually stands for has considerably diluted.
Historically, the main emphasis of CSR has been on social and environmental engagement. In today’s economic crisis shareholders, employees, customers, suppliers have more, different needs. Amid economic uncertainty they look for reliability,  for responsible companies that are viable and sustainable. But even more so, they expect company leadership to showcase that sense of responsibility, to evidence ethical behavior in running their business. Against the background of too many major disappointments (finance, automotive and others) stakeholders want to “put their money” with companies that do understand their concerns and are seen to pre-empt them.
That to me is the essence of what Corporate Responsibility today should stand for. Not a nicely phrased CSR statement, not a promise of good intentions but a genuine sense of trustworthiness. That is also what local and EU policy makers are increasingly scrutinizing for – and rightfully so!
Corporate Responsibility, in my view, spans the ground between three solid pillars: financial viability, ethics and sustainability – firmly held together with the glue of mission, vision and values and actually embedded in the DNA of a company and its leadership.