Six trends that will shape corporate communications in 2020
We hope that the year got off to a good start for you. Wondering what 2020 has to offer for communications professionals, we’ve asked some of our colleagues from CFF Communications, Grayling and Citigate Dewe Rogerson to share their freshest comms insights!
This long read in 15 seconds:
- Shareholder Rights Directive II underlines importance of stakeholder engagement
- More focus on ESG performance and widespread activist defense preparations
- Diversity playing a bigger role in corporate governance
- AI plays bigger role in comms and public affairs, but a human touch remains key
- Younger consumers choose authenticity over polished perfection
- Social responsibility goes beyond legal liability
We hope that you will enjoy reading our 6-minute read with the latest trends in financial communication, public affairs, corporate communication, brand PR and media intelligence. And if you want to share your insights, do get in touch!
💬 Shareholder Rights Directive II underlines importance of stakeholder engagement
The Shareholder Rights Directive II (SRD II) aims to strengthen the position of shareholders and limit the focus on short-term gains and excessive risk-taking. After the European legislation SRD II came into force, the Dutch House of Representatives (Tweede kamer der Staten Generaal) adopted a series of legislative amendments that oblige companies to (better) define how their remuneration policy fits the company’s long-term objectives. Companies must also investigate and report on the public support for their remuneration policy. These amendments, ratified by the Dutch Senate in November, are:
- A (change in) remuneration policy requires at least three-quarters of the votes cast, unless a lower majority is prescribed in the articles of association. Every year, a company has to present a remuneration report on which the AGM can cast a non-binding vote.
- The works council has stronger consultation rights in the remuneration policy. The works council’s advice on remuneration must be presented to the AGM at the same time as the proposal to adopt the remuneration policy. If the advice of the works council is not or not entirely included in the proposal for remuneration, the remuneration committee, must submit a written substantiation to the general meeting.
- If the Works Council nominates one or more members of the Supervisory Board, they must be given a place on the remuneration committee. This legislation also applies to non-listed companies.
- In the remuneration policy companies have to specify how the remuneration policy takes account of (i) the identity, mission and values of the company, (ii) the pay-ratio within the company and (iii) public support for the remuneration policy.
Although the SRD seems to focus on communication with the shareholders, everyone can assume that communication efforts will not stop there. On the contrary, remuneration is and remains a topic of interest to many stakeholders. Good interaction with all target groups about the how and why of the remuneration policy therefore seems a necessity. Improving communication and substantiation on remuneration policy is exactly the rationale behind the implementation of SRD II.
Janneke Dijkstra – Director at CFF Communications
🌱 More focus on ESG performance and widespread activist defense preparations
There’s a greater focus on articulating long-term strategy and ESG performance in light of growing pressure from both passive and active investors, the Annual IR Survey from our London-based colleagues at Citigate Dewe Rogerson shows. Almost 75% of IROs plan to make significant improvements to IR information sources over the coming 12 months. “56% go above and beyond regulatory requirements when it comes to ESG reporting and 47% plan to improve ESG disclosure over the coming 12 months.”
When it comes to preparations against activist investors, there’s still some room for improvement. 31% of the companies feel well-prepared, while 36% are working on their activist response strategy.
Sandra Novakov – Head of Investor Relations, from our colleagues at Citigate Dewe Rogerson in London
🌈 Diversity playing a bigger role in corporate governance
Institutional Shareholder Services (ISS) and Glass Lewis, the two leading providers of corporate governance research and proxy voting services, have published their updated proxy voting guidelines for 2020. In case a company has no women on its board, ISS will vote against the proposed appointment of a male. Recently, Goldman Sachs announced they will no longer take a company public in the US and Europe anymore unless they have at least one ‘diverse’ candidate, preferably a woman, on their board.
Dutch Parliament voted in favour of a binding quota for female representation at listed companies in the Netherlands, in compliance with recommendations from the Social and Economic Council (SER). The SER thinktank demanded that at least 30% of the supervisory board members of listed companies must be female. If a listed company does not meet the quota, then all new appointments of male supervisory board members should be annulled, until the quota is met.
Teun Verhagen – Senior Media Analyst at CFF Communications
🤖 AI plays bigger role in comms and public affairs, but a human touch remains key
2020 marks the rise of artificial intelligence (AI) solutions in the world of communications and public affairs. There are many definitions of AI. One definition is a system’s ability to correctly interpret external data, and to achieve specific goals – e.g. generating a desired output, like recognizing your face, or making the right decisions. In communications, PA and media monitoring, AI solutions can save a lot of time by removing repetitive tasks.
When analyzing media coverage or PA data, AI techniques like natural language processing can create a new, additional layer of insight. To asses the true meaning of this, human intelligence however remains key – to ask the right questions, to tweak the system to produce the relevant output, and to draw the correct, meaningful conclusions. Instead of replacing human intelligence, AI will more and more be seen as a valuable addition that enriches our intellectual capabilities.
Pim te Bokkel – Head of Digital at CFF Communications
📱 Younger consumers choose authenticity over polished perfection
Jon Meakin, from our sister agency Grayling, writes in the agency’s trend blog that especially younger consumers increasingly value authenticity and integrity over polished perfection. “And principled brands are responding by openly sharing meaningful information and content that matters to people, from visible supply chains and behind the scenes Instagram stories to candid admissions and apologies that ring true.”
Jon Meakin – Global Head of Strategic Services at Grayling
🌍 Social responsibility goes beyond legal liability
Globalization has changed our life in Western Europe. The financial crisis, the climate crisis, and digitalization have politicized our economic lives. Politicians, corporates and society are struggling with the question who’s responsible for what.
In this new reality, it’s key for companies to understand that social responsibility goes beyond legal liability. There’s an ever bigger need for an integrated approach towards corporate communications, PR and marketing.
It’s key for businesses to tell their story, as an integrated message – explain what you are doing for your employees and other stakeholders.
Engage with your stakeholders, and explain what you are doing for your employees, the local community, and society as a whole. Listen to society, and incorporate this in the decision making process. For actions speak louder than words.
Jan Willem Blok – Public Affairs Director at CFF Communications
About CFF Communications
Established in 1993, CFF Communications has evolved to become the leading agency for financial and corporate communication in the Netherlands. With a dedicated team of 40 professionals, the agency delivers quality services including media relations, crisis communications, investor relations, media monitoring, public affairs, brand communication and content creation. CFF Communications is also the leading agency for the communication of IPOs on Euronext Amsterdam.