Do You Have a Review Process for Public Communication?
Because investor relations and public relations do not have the same audience, the same objectives, and often do not report to the same supervisor within a given company, they frequently work in isolated silos with limited interaction. But there is a need for collaboration between the information “silos” that exist within some organizations, especially in publicly traded companies and private companies preparing for an IPO. For these types of companies, it’s important to establish — and stick to — an internal control process for issuing public information.
Many of us have likely seen the silos play out in one scenario or another.
The CFO saying he was surprised by a press release that his company had issued pre-market, about which he was already getting calls from analysts with questions. The General Counsel asking how his company could add a Forward-Looking Statement paragraph on a material release that had already been issued. The CEO asking to make corrections to outdated language in the “About the Company” section.
This happens in small companies as well as large ones. And it happens more times than you would think – in part due to the fact that some companies believe they are always aware of what’s in the works and a formal control process isn’t necessary.
In other cases, management has at least an informal internal control process. But in the haste of getting out a release, this process is bypassed under the assumption that everyone who “needs to know” is in the loop on the review cycles. This can result in key individuals being bypassed and being unaware of the timing of the announcement. As a result, they have no time to prepare for incoming questions from board members, the financial community, business partners and even reporters. Moreover, critical Reg FD components can end up being omitted and boilerplate language branding the company is not current.
Here are a few ways to avoid situations like this.
- Establish a process for issuing releases that specifically includes signoff from all key executives — especially those who might be in a position to respond to the release. Use it for every single release, regardless of how seemingly routine the content.
- Determine in advance the ideal timing for any release, ideally as far out as possible, and have discussions about what it will take to hit the deadline and how it is tracking. For example, are you including another company’s name or a quote in the release? If so, you need to factor in sufficient time for their review and approval cycle. If it looks like a deadline will be tight, consider alternatives such as waiting a day or two to issue the announcement (if the subject matter will allow).
- Identify a single person who owns the draft and is responsible for gathering all the required input, edits and final signoffs. Based on release content and your company’s guidelines, consider including the C-suite, outside counsel, auditors, other organizations named in the release, and your IR and/or PR counsel.
- Identify a single person responsible for giving the “final approval.” Typically, this will be the CEO, CFO or General Counsel. Make sure this is documented before it goes to the wire service for final release.
- Create a “safety net” that reconfirms with the internal team – as well as any third party included in the announcement – what is about to be made public. Our team at ICR Westwicke is often responsible for issuing the final release. We confirm that NASDAQ or the NYSE (if required) will get an advanced copy of the release. We also confirm in an email to the internal executive team with the date/time of release with a copy of the final release attached.
- Coordinate internal digital and social media activities to ensure that the announcement posts on your website and social media channels in tandem with the press release crossing the distribution wire.
Internal controls are a critical part of the communication process and why we stress the importance of having procedures in place so that all messaging is consistent and meets Reg FD, etc.
For a conversation about how to tighten your own process for releasing public information, reach out.
ICR Westwicke is the largest healthcare focused investor relations firm in the country. We provide customized investor relations programs and independent capital markets advice to small and mid-cap healthcare companies.
Great article. We created a check-list that every news release goes through to ensure nothing is missed. It is extensive, but asks all the questions that often get forgotten when you’re under a time crunch. It starts and ends with the Director of Communications and all back-up documents and sign-off are attached to it and filed.