FCLTGlobal / McKinsey's interviews with eight long-term investors* elicited sound advice for companies across multiple COVID-19 trending topics.
Key takeaways subject to any liquidity and going concern issues include:
- Prioritizing workforce health & safety
- Helping weaker customers and suppliers survive by retaining their business, if feasible
- Looking for and pursuing crisis-prompted opportunities (e.g., M&A, new talent, less real estate)
- Reducing emphasis on dividends and stock repurchases
- Regular and transparent communications to investors about the impacts of the pandemic on the business and its prospects, whether and how it will recover
Importantly, all of the foregoing is couched in the context of each company's liquidity position, i.e., investors don't expect companies with insufficient liquidity or going concern threats to take actions inconsistent with survival. However, if companies are experiencing liquidity issues, investors expect them to communicate frequently about their status and how these concerns are being managed or mitigated.
*Investors represented Invesco, SSGA, Kindred Capital, Pzena Investment Management, Counterpoint Global, Autonomous Research US, Goldman Sachs, and MFS Investment Management.
See our prior reports: " Telling Your Story: Key Themes" and "COVID-19 Responsiveness: Investor Engagement" and additional resources on our Coronavirus (COVID-19) Resources page under Disclosure/Communications and on our Institutional Investors and Shareholder Engagement pages. This post first appeared in the weekly Society Alert!