21 May LESSONS FROM: THE NUIX IPO AND VIRGIN’S PR NIGHTMARE
Welcome to a slightly different edition of Cannings’ business and media intelligence update. Rather than sharing top stories, we’re sharing our top lessons from a week where a lot went wrong.
LESSONS FROM: THE NUIX IPO
Since its IPO in December, the Nuix share price has fallen dramatically, following allegations of infighting, inadequate prospectus disclosures and missed forecasts. This has been a huge disappointment for investors, while seriously damaging the reputation of the company and its management.
So, what can we learn from the Nuix float, from an IR and PR perspective?
- BE IPO READY: Ensuring your accounts are in order and governance systems are in place well in advance of an IPO helps. So does having an adequate level of understanding of reporting requirements and expectations of investors. Chairman Jeff Bleich admitted the company “didn’t develop the internal structures it needed to have strong investor relations across the broad spectrum.” Public responsibility workshops are a good way to get ready for listed life.
- ARE YOUR FORECASTS ACHIEVABLE: Missing your prospectus forecasts within months of listing is “the cardinal sin of IPOs”, according to one fund manager. Building trust with investors is a key priority.
- TAKE RESPONSIBILITY: Becoming a leader of a listed company brings greater demands and greater scrutiny. Stakeholders expect you to take full responsibility for company performance – good and bad. During an online investor meeting, Bleich and Chief Executive Rod Vawdry took “full responsibility for the performance of the business,” and apologised for the issues that occurred in the early months of the public company. Bleich also added that Nuix would review its governance structures and leadership.
LESSONS FROM: VIRGIN’S PR NIGHTMARE
This week, Virgin Australia came under fire from all sides following comments made by Chief Executive Jayne Hrdlicka. Calls for a boycott of Virgin Australia were quickly trending on Twitter in the wake of comments that borders should reopen even if “some people may die”. Although Hrdlicka had been careful in her words and was attempting to compare the death rate for people contracting the flu, she came under sustained attack, including a rebuke from the Prime Minister.
Once again, it reinforces the need for organisations – private and public – to consider all stakeholders in their messaging.
LESSONS FROM: FORCED CEO EXITS
A new study by global management consulting firm Kearney, has found that the average tenure of CEOs in Australia has fallen dramatically in recent years. It also found that there is a lasting impact on share prices when CEOs exit for not financial or ESG related reasons.
Australian boards need to engage with stakeholders more than ever before, to really understand how they perceive management. But it’s hard for boards to know whether they are getting the right feedback, which is where audits can help.
Investor perception studies deliver valuable feedback on current investor and analyst sentiment as well as provide a useful reference point for board’s and management for future stakeholder engagement.
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