Our Blog: The Podium

You probably have heard your CEO or a member of the board expound on the need to have a succession communications plan. (Perhaps you have been the one doing the expounding.) And it’s true: public companies should put significant thought into how they will communicate the transition of a C-level executive or board member. But usually, that’s where the conversation ends.

More often than not, communications professionals walk away from these discussions wondering what goes into the plan. With that in mind, today we discuss the five essential elements of a successful succession communications plan.

• Make the plan

As soon as you know your board is conducting a CEO search, create a detailed timeline that will keep your succession communications on track. Name each task with the target completion date and the name of the person or people responsible for implementation. List all the materials that are necessary for the

When many management teams contemplate the quarterly earnings cycle, they think primarily about compliance – dotting the “i”s and crossing the “t”s. But while compliance is a major driver of financial disclosure, it should not be the only one – if it were, companies would file the 10-Q or 10-K and leave it at that. Take a more strategic approach to your next earnings cycle with these five tips.

Bill Harts is the CEO of Modern Markets Initiative (MMI), an advocacy organization devoted to the role of technological innovation in creating the world’s best markets. MMI engages and educates public audiences about the value modern market professionals provide to today’s electronic marketplace. Harts is known in the financial services industry as a pioneer of algorithmic trading, as well as an authority on financial market structure and applied technology for trading.

Q: Thank you very much for being here, Bill. Can you tell us about Modern Markets Initiative? What are your goals?

A: Modern Markets Initiative first came together in late 2013. Our mission has always been to educate people about what high-frequency trading is, how it works and most importantly, how it saves a lot of money for investors and continues to do so every day.  Also, we wanted to serve as a resource to let investors and issuers alike understand the important role of high frequency trading in the trading ecosystem.

Investor days are one of the largest and most influential investor events a company can organize. They also are arguably the most overwhelming, triggering challenges in logistics and human resources for public companies large and small.

But don’t let organizational challenges prevent you from hosting a successful investor day that will have both your company and your investors happy.

We recently spoke with Baruch Lev, the Philip Bardes Professor of Accounting and Finance at New York University Stern School of Business. In “The End of Accounting and the Path Forward for Investors and Managers,” Prof. Lev and Feng Gu, associate professor at the University of Buffalo, propose a new system to improve transparency of corporate accounting.  This system aims to make public accounting disclosures more useful to investors. They encourage investor relations professionals to begin discussions with management to increase the usefulness and relevance of company disclosures for investors.

A great IR website is not only about compliance; it’s also about creating a space investors can look to understand the qualitative aspects of your company’s story. While providing financial data and reports is important, what separates the best sites in the world are those that focus on providing context on the company’s strategy and clarity about its execution and vision.

If you’re thinking about launching a new IR website or refreshing your existing site, here are five best practices that will keep your investors engaged in your corporate story.

Timing is everything. On Tuesday, one of the “Original Six” hockey teams fired its long-time coach Claude Julien, who in 2011 led the team to a Stanley Cup victory. The Bruins had underperformed in recent years, especially this one, and Julien, who had been the NHL’s longest-tenured coach, was shown the door. The announcement of the firing caused immediate backlash among the media and fans in New England.

What caused the uproar, however, wasn’t the actual firing of Julien, although he certainly had his defenders among Bruins fans. The problem was timing. The Bruins fired Julien two days after the New England Patriots had won Super Bowl LI in historically dramatic fashion. And in what is undoubtedly no coincidence, the announcement took place on the day of Boston’s celebratory parade and rally for the Patriots -- a day when hundreds of thousands of fans clogged the city streets to get a glimpse of their gridiron heroes. The city’s sports focus was most certainly on the Patriots. And that’s what the Bruins were counting on.

Note: This is the finale in our three-part series on succession communications.

As you’ve no doubt noticed from our previous posts on communicating CEO and CFO transitions, there’s no such thing as a “standard” executive announcement. And messaging board-level succession carries additional nuances you’ll need to consider as you frame a board change in the best position for long-term success with the investment community.

To assist in that effort, here are five points to guide you in announcing a change on your board.

1. Change is good. Change carries inherent uncertainty, and investors typically frown on that. However, institutional shareholders, and shareholder activists in particular, have emphasized board refreshment in recent years as a means of improving corporategovernance. Proxy advisers Glass Lewis and ISS also view it favorably. The theory here is that more frequent board turnover opens a company to new thinking and the best possible strategic benefits in the long run. Put another way, your board either can be stagnant or growing. Approach your announcement from a confident perspective, because chances are your shareholders will welcome the addition of new viewpoints.

Note: This is the second in our three-part series on succession communications.

A new CEO is the highest-profile personnel announcement a company can make, but a new CFO isn’t far behind. As with any executive transition, the reasons can vary widely – from termination to mutual separation to a legitimate retirement. Regardless of the rationale, however, you’ll need to negotiate a different set of questions when communicating a CFO transition.

Whether it’s the longtime CEO’s retirement or the recent hire’s sudden exit, communicating the transition of the top executive is one of the most critical messaging tasks a company can undertake. So let’s discuss them both: the transitions that are well-planned, thoughtful and strategic, and those that are likely to catch investors by surprise. Here are three things to remember before your company changes CEOs.