By Virgil Scudder
It’s always hard to tell the boss that he or she isn’t doing something right, especially if the boss is a powerful CEO and the IRO is only at the VP tier. But, in my view, IROs at a lot of companies need to be more assertive.
It’s a mistake to sit quietly by, loyally nodding, as the CEO is making some common mistakes that erode the credibility of both the leader and the company.
Earnings calls are a perfect example. It is a rare CEO who really enjoys those quarterly tete-a-tetes with analysts. Earnings calls involve a lot of preparation, no small amount of stress, and the sobering awareness that saying the wrong thing, or saying something the wrong way, can punch a big hole in the stock price.
In my experience, the heads of major companies generally do pretty well in handling these often-challenging encounters. However, there are some common mistakes that CEOs should take special care to avoid-and you can help them. Here’s my list:
- Excessive exuberance. “We’ve turned this company around,” the CEO triumphantly declared in reporting strong quarterly earnings. Naturally, the stock went up. But, when the next quarter’s earnings tanked, the stock nosedived-falling to a point lower than would have been likely if the company’s leader hadn’t over-reacted to the previous strong quarter. Curb, but don’t lose, your enthusiasm.
- Playing the CFO. This is a curse of CEOs who have moved up from the top financial position. They lay out the numbers that the CFO is paid to deliver, rather than providing an overview of trends and developments and what the results mean to the company’s game plan.
- Too much detail. Some CEOs are determined to use the earnings call to show that they know every little detail about the company. That’s not the CEO’s job. The company leader should have a broad view of the organization and articulate where it is headed and why. When too much is said, too little is often understood. And the most important points get lost.
- Using the historical approach. The best answer is always a straight, head-on answer. Headline, then elaborate. Save the history of the company, the industry, or the planet for another forum.
- Lackluster script delivery. The earnings call script is more than a set of numbers and facts. It is a narrative, a story, and it should be delivered with some energy and emphasis. Droning through the script sends a message that the CEO is uninterested, uninvolved, or uninformed.
- Failure to rehearse. The CEOs who sound most confident and in command on earnings calls are those who take the time to rehearse prior to the call. Both the scripted portions and the Q&A should be audio-recorded during the rehearsal and played back for analysis and critiquing. The steps to better delivery and better Q&A responses become apparent when listening to the playback.
- Providing facts without form. The best CEOs tell us what the facts and figures mean and how they impact the long-term business plan. An earnings call is not just a report card; it’s also a progress report. People don’t buy stock based on where a company is; they buy it based on where they think the company is going.
- Lack of perspective. Where does the company stand in relation to the performance of its industry and the overall economy? These are things a CEO should be telling us-not for the purpose of rationalizing poor performance but for giving shareholders a clear picture of conditions and prospects.
- Massaging the numbers. A poor quarter is a poor quarter is a poor quarter-period. Analysts will see right through any effort to present it otherwise. f the numbers are disappointing, the CEO should say so, say why, and tell people what is being done about it. This is how credibility and long-term shareholder loyalty are built.
- Forgetting what really matters. The key question in every earnings call is this: Is the leadership on top of whatever its current situation may be and does it have an effective plan to deal with it?
Finally, since everybody likes something for nothing, let’s throw in one more item. This is not a common CEO mistake, but rather a worst-case example. On an earnings call a couple of years ago, a newly-named company leader immediately put on the goat horns. He was combative, refused to answer relevant questions, and declined to address questions on topics he himself had brought up in his script.
That was bad enough, but it got worse. Mistakenly thinking his microphone had been turned off as the call ended, he snapped to his IRO, “Let’s get the f*** out of here.” As a result, the call became a mainstream media story and the CEO had a lot of explaining to do to his board. The lesson here: Analysts are your conduit to your company’s owners. Treat them like you would your biggest shareholder. And, don’t swear until you are outside the building.
Few, if any, CEOs would describe an earnings call as fun. But those who avoid these common mistakes will find the perception of their leadership enhanced. And, make no mistake about it: The image of the company leader clearly impacts the share price.
Virgil Scudder is founder of Virgil Scudder & Associates. He has conducted training throughout the U.S. and in many far-ranging locations including Australia, Tokyo, Hong Kong, Indonesia, Canada, Puerto Rico and the Netherlands. His clients include CEOs of numerous major corporations and government leaders in the U.S. and abroad.
From the Bulldog Reporter’s IR Alert.
Pingback: ivermectin 12 mg over the counter
Pingback: ivermectin eye drops
Pingback: ivermectin 3mg online
Pingback: ivermectin 6mg for sale
Pingback: buy ivermectin online
Pingback: cialis generico
Pingback: hydroxychloroquine adverse effects
Pingback: daily use cialis over the counter at walmart
Pingback: generic cialis otc
Pingback: what is in hydroxychloroquine
Pingback: slovar po psihoanalizu laplansh
Pingback: bahis siteleri
Pingback: SHKALA TONOV
Pingback: Øêàëà òîíîâ
Pingback: stromectol pill for humans
Pingback: buy stromectol 6mg online
Pingback: stromectol brand name
Pingback: mir dikogo zapada 4 sezon 4 seriya
Pingback: how long for cialis to work
Pingback: cialis walmart
Pingback: cialis and viagra together
Pingback: Dom drakona
Pingback: psikholog moskva
Pingback: Usik Dzhoshua 2 2022
Pingback: Dim Drakona 2022
Pingback: buy ivermectin
Pingback: history-of-ukraine.ru news ukraine
Pingback: site 2023
Pingback: generic viagra cialis and levitra
Pingback: Do all antibiotics cause heart problems hydroxychloroquine price
Pingback: Is activia a good probiotic
Pingback: batmanapollo.ru - psychologist
Pingback: How common are parasitic infections
Pingback: How to prepare albuterol and use it in a nebulizer
Pingback: batmanapollo psychologist
Pingback: How do you make money in a depression
Pingback: What age does heart failure usually start Zestril
Pingback: Buy Stromectol tablets
Pingback: Are bananas good for parasites - Zithromax generic name
Pingback: kamagra oral jelly - Was passiert wenn man Viagra mit Alkohol nimmt
Pingback: get doctor prescription online
Pingback: Comment Fait-on l'amour a une femme enceinte pharmacie en ligne livraison gratuite
Pingback: Quel pays a le plus petit zizi du monde parapharmacie leclerc
Pingback: pramipexole 0.25 mg tablet
Pingback: buy femara 2.5 mg pill
Pingback: What makes a relationship lasting?
Pingback: What are signs of true love between a man a woman?
Pingback: stromectol 3mg scabies - Why do I feel weird after taking antibiotics
Pingback: What are the 3 quality types?
Pingback: What is Limerence?
Pingback: How do you make him value and respect you?
Pingback: What is romance to a woman?
Pingback: How fast can a liver recover what is ivermectin used for
Pingback: What is the best natural remedy for asthma purchase albuterol pill
Pingback: viagra naturel homme - Comment ne pas rompre le liens familiaux?
Pingback: What does untreated asthma look like order ventolin 4mg for sale
Pingback: What are the best medicines for asthma buy ventolin generic
Pingback: What does Russia use instead of antibiotics
Pingback: What happens if you take antibiotics without infection
Pingback: What are symptoms of too much antibiotics
Pingback: Should antibiotics be taken for 3 or 5 days
Pingback: How do you know if antibiotics are working
Pingback: How many days is a full round of antibiotics
Pingback: Can I drink coffee while taking antibiotics
Pingback: How long do side effects last from antibiotics
Pingback: What are 3 common parasites that are harmful to humans ivermectin uses
Pingback: levitra prescription online
Pingback: How many days of antibiotics is too much
Pingback: levitra professional samples
Pingback: 50 mg viagra generic
Pingback: Do antibiotics clear all infections
Pingback: Äèçàéí ÷åëîâåêà
Pingback: Can you stop antibiotics early due to side effects
Pingback: What happens if you take antibiotics without infection
Pingback: Is 2 days of antibiotics enough