Why waiting to communicate to investors about Coronavirus became a mistake at about 7.30pm last night

Alan Kohler lead his national ABC finance update last night with "Superannuation balances and investor portfolios were hammered...". Media – even Alan Kohler - is the wrong source of Coronavirus information for superfund members and investors.

With COVID-19 pandemic fears growing, sold out toilet paper becoming a major national news story and the ASX dropping nearly 20% since February 20, Australians now find themselves in a state of mild panic.   

This morning I briefed clients on how CEOs we’ve spoken to in the last 24 hours are responding to Coronavirus and we gave some general guidance on what to do next in terms of issue and communication response. The insights I shared weren't drawn from the media, but information provided by CEOs, most of whom lead businesses immediately affected.   

A common response from CEOs during an emerging crisis is to sit tight and avoid communicating about the issue in fear of making the matter worse. While this might seem sensible it can be an under-reaction that leaves leaders and your brands seen as not ‘present’ when investors need you most.  

At some point, usually earlier than you’d like, staying silent means you have even less control in the face of uncertainty. That’s a risk that’s not worth taking. Unless you want the media driving your clients’, investors’ or superfund members’ decisions and actions. 

Research and our own analysis of the GFC, 9/11 and market disruptions have repeatedly shown media reporting dials up emotive content and doesn’t always replay factual information objectively, i.e. in context.  

The less sophisticated the audience, the greater the problem this is. An obvious risk is that superfund members reading the media react in ways that cause them long-term financial damage.   

For superannuation funds, communicating with your members about the likely effect of the Coronavirus on their savings and what they can expect in the long-term is the only way you can help them making rational, sober choices.   

Read an edited version of our client briefing here. For tailored advice or a second opinion on your Coronavirus response, reach out to us directly.