IR Checklist: Projecting Certainty in Uncertain Times

You’ve probably heard the following expression: “May you live in interesting times.” It’s frequently recited not as an inspiring quote, but rather a curse, often characterized as being indeterminately foreign in origin. Perhaps the person who coined this phrase realized that along with “interesting times” comes uncertainty, and with uncertainty comes a whole host of challenges. The U.S. population can relate, or at least our IR professionals can.

It’s not easy to tell shareholders a clear story about your company, after all, while wildfires, protest movements, and history-changing elections rage distractingly in the background. To help, Intelligize has produced a handy checklist for IR professionals. They can use it to stay focused and project calm through these “interesting” and uncertain times. (Download it here.)

The checklist contains several concrete tips, some of which are already being put into action by IR teams. To start, Intelligize advises public companies to make sure your presentation materials reflect your current priorities. For instance, we said: “If the health of employees and communities is currently your number one goal, consider moving your human capital management discussion to the front” of your decks. Some issuers are doing just that. In an investor presentation from September, W.R. Grace addressed two health-and-safety-related issues on its very first page: how the company has responded to COVID-19 and Hurricane Laura.

ESG issues, in particular, are sources of rapid (positive and negative) change in 2020. For that reason, our checklist recommends giving them an appropriate level of prominence, and making information about them easy to digest with infographics and charts. In another investor presentation from September, Patrick Industries included a slide on ESG toward the front, before metrics about its financial performance. And Sun Communities, Inc., which published its first dedicated ESG report in 2019, included an ESG-focused chart in its September update to investors.

Another specific takeaway from the checklist, which can help IR professionals control the perception of their company in a volatile world: Make sure that auto-generated news coverage of your earnings calls is accurate. That’s right, robots are now listening to earnings calls, and determining how upbeat or downbeat management is based on the words they use. As this academic paper notes, machine learning systems are taking the use of “uncertainty words” to be something of a warning sign.

Take, for instance, the qualifying words in this answer from Winnebago’s CEO (sub. req.) about the “mild” impact that fourth-quarter supply-chain issues had on the company’s profitability: “[I]t is possible that mild may turn into a slightly higher degree of mild in quarter one of fiscal 2021, arguably . . . .” Compare that to the more definite language in, say, the management remarks from a Twilio investor day meeting (sub. req.): “We are building . . . fantastic products that must serve all of our global customers, and trust through fraud and security protection is the number one thing we sell.”

At the least, IR professionals should be on the lookout for AI-generated coverage that misinterprets their messages. Meanwhile, those who want to game the system are actually adjusting their language to avoid using words that could be construed as negative in the first place.

This language accuracy discussion brings us full circle back to the curse we discussed at the top. As it turns out, “may you live in interesting times” is most likely not even a real curse. Even Wikipedia is at a loss when it comes to the true derivation of this simple saying. The “curse,” as it were, may just be one of the earliest examples of fake news – the type of misinformation that renders one even less certain in this increasingly uncertain world.