Don’t Forget: Your Employees are Shareholders, Too

Many companies encourage their employees to invest in the company’s stock through the 401(k) plan; but, unlike Wall Street investors, these shareholders are often among the last to know when major developments occur in the company. In fact, they may first learn about them when they open the morning newspaper.

To be fair, public companies do not have it easy. They are required by law to first notify the Securities and Exchange Commission (SEC) when material events, good and bad, occur between regular public reporting periods. Wall Street, institutional investors, and the media closely follow these filings and may learn of developments at a company well before the average person on “Main Street”, which includes your rank-and-file employees. But being the last to know can be demoralizing and can lead your employee-shareholders to feel disenfranchised.

So, what can smart corporate communications executives do about it? When news is about to break, the internal (intra-company) communications team must first judge the significance of the announcement to determine whether immediate communication with employees is appropriate; and, if so, quickly decide the precise nature of the message, who it should come from, and the urgency with which it should be disseminated. Some disclosures made in SEC filings do not warrant communicating with employees at all, while others may require that an urgent message be sent by the CEO.  Then, there is everything in between.

Once it has been decided that a message should be sent to all employees, many of whom are also shareholders, and the nature and timing of the communications has been determined, the tools available today to create and distribute the content are better than ever. Whether company intranet, email, social media, traditional mail to home address, or a combination, management is able to effectively and efficiently communicate with employees, like they do with institutional shareholders, which is an important component of any program to optimize employee engagement.

 

Fred Clayton

Chief Executive Officer,

Head of Finance and Investor Relations Practice

Berkhemer Clayton, Inc.