COVID-19 is, of course, a human tragedy, affecting hundreds of thousands of people. But it is also having an impact on businesses and, in turn, the global economy.
Markets don’t like uncertainty, and COVID-19 brings a fair share with it. As a result, we have seen markets fall globally.
During times of crisis, effective communication is essential. People rely on information to understand unfolding events and to make decisions.
The point of communicating during a crisis is to help manage people’s expectations and reduce uncertainty. From an investor engagement perspective, effective communication is essential to the stability of the capital markets.
At Luminous, we echo the Financial Reporting Council's advice that “Companies should consider whether to refer to the possible impact of COVID-19 on their business in their reporting of principal risks and uncertainties. Where mitigating actions can be taken, these should also be reported alongside the description of the risk itself.”
But companies should also take the opportunity to communicate and contextualise the impacts on their business and stakeholders. One of the first of our clients to do so has been PPHE Hotel Group, which has published a commentary on and risks about COVID-19 in its latest Annual Report.
From a communication perspective, we believe it’s essential to be as open as possible and provide relevant and timely information to all stakeholders. From an investor engagement perspective, companies should provide as much detail on the impact and outlook as possible, even if in ranges.
If you have any questions, please do not hesitate to get in touch.