Charlotte Thuot Kucyi has seen more change in a few short years than many IROs see in a lifetime. Senior Manager, Investor Relations, at Toronto-based Tricon Residential, Thuot Kucyi was responsible for briefing and handholding investors through several corporate highs and lows, one cascading after the other.
“It’s like I’ve lived 1,000 IR lives,” she says of the past four years at her job. “I had never done a proxy battle, I’d never dealt with an activist, I’d never experienced interest rates at 6%-7%, and I’d never done a U.S. IPO. I got to check all these off my IR bingo card.” She capped off this rollercoaster ride with Tricon’s going private, as it was purchased by Blackstone Real Estate on May 1.
Thuot Kucyi is not alone in dealing with momentous events occurring at whiplash speed. Other IROs are dealing with similar shakeups. Take just one of the more jarring changes – new leadership at the top – and think Per Bank becoming the new president and CEO of Loblaw in September 2023, or Jonathan Price assuming the helm at Teck in the fall of 2022.
In addition, many Canadian IROs are experiencing fresh challenges when it comes to communicating about change because institutions are facing a crisis of trust. While business in general is viewed as more trustworthy than other institutions (such as government or media), skepticism is rampant. In fact, according to Edelman’s 2024 trust barometer, 61% of global respondents believe business leaders are purposely trying to mislead people by knowingly saying things that are false or through gross exaggerations.
The good news here is that rapid and unrelenting change has conditioned stakeholders to take surprises in stride, maintains Thuot Kucyi.
“In this environment, companies just need to naturally evolve and change and grow,” she says. “I think that IROs shouldn’t be afraid of communicating change. Now more than ever, investors expect it.”
The Psychology of Change
Some of the savviest tips for communicating about change are rooted in the field of psychology.
Rafael Chiuzi, an organizational psychologist and an assistant professor at the University of Toronto, urges IROs to strive “to balance change and stability.” He points out that regardless of the change a company is facing, what is staying the same matters as much as what will be new and different. “Investors need to understand the foundational elements they rely on are not being compromised by [an upcoming] change,” he says.
If consistency matters, so does identifying the right aspects of a change to communicate. Chiuzi maintains that the nuts and bolts of change are best left out of the discussion. Instead, he maintains that investors are interested in “the why” behind the change.
Simona Antolak, Vice President, Communications & Corporate Affairs, for Wheaton Precious Metals, draws a distinction between anticipated and unanticipated change. With a change that’s long been in the works, such as the name change Wheaton underwent in 2017, the communications strategy can be extremely finely honed.
Antolak points out that the new name made perfect sense for the Vancouver-based resource company given that gold had become the source of 40% of revenues, up from 5% in earlier days. “If you’re called ‘Silver Wheaton,’ a lot of time you’ll get valued as a silver company,” she says. “We knew we had to get recognition for our gold business because gold companies were trading at a higher multiple.”
Even with such a rock-solid rationale, says Antolak, “it took a long time to get the name out there in the market. For about a year, people interchangeably used ‘Silver Wheaton’ and ‘Wheaton Precious Metals.’”
Antolak and her IR colleagues intentionally created a communications platform to reach “all entities that would be impacted by the change,” from internal employees to investors, the media, and community partners. Even so, she remembers that some stakeholders were particularly resistant, many having forged a strong attachment to the original name.
Antolak is convinced that the key to gaining support for the rebrand was a consistent and targeted flow of communications, including a formal news release, a corporate presentation and a dedicated web page explaining the change.
Organizational psychologist Patrick Bensen, Director and Founder of the Canada-based Leaders of Tomorrow Institute, also emphasizes the need for regular communication.
What’s more, Bensen maintains that acknowledging difficulties can be a way to build credibility. “If you say, ‘We’re still going from A to B, but there are just rough seas,’” you can use change to your own advantage by reinforcing your core values, your mission and your vision for the company,” he says.
Putting a Face to Your Message
Although 'change management' is an increasingly popular buzzword, many organizations miss a prime opportunity to communicate effectively about change by not detailing the expertise of the team leading the charge, says Chiuzi. The better investors understand the credentials of the individuals behind a change initiative, the more security they have “that the company is taking the proper measures,” he says.
“If instead of releasing a statement, you have the CEO, or the Chairman of the Board, attach their face – and their credibility – to what’s being done, I’ve seen firsthand how powerful it can be,” he says.
Sarah Zapotichny, a former IRO and current Vice President of Business Development & Corporate Strategy at Calgary-based GreenWorks ESG, observes that another persuasive element in any change scenario is a personal narrative. “It can potentially take an investor off the ledge when you take the time to be human and relatable,” she says.
To tell a successful story, an IRO should provide context and background in a natural and even conversational style, says Zapotichny. In this situation especially, she advises againownst corporate jargon, which so many businesspeople hide behind, because it can undermine the bonds that a narrative creates.
When it comes to storytelling, IROs have a unique role to play. That’s because IR professionals excel at transforming dry numbers into something far more compelling. Thuot Kucyi notes that stories often carry the most punch in one-on-one conversations, even when these meetings are held over Zoom.
A recent incident at Tricon highlights the importance of an engaged IR team. On April 12, Tricon’s stock suddenly dropped 12% for no apparent reason. Thuot Kucyi quickly realized that the stock had plummeted because bots were selling based on “an article that had nothing to do with us.”
As calls and emails started pouring in, she quickly provided a convincing explanation and quelled the panic.
“It’s an interesting example of how important IR is,” she says. “Everyone is moving towards AI and bots, but the robots do make mistakes. Having somebody in IR that investors can call and say, ‘Am I missing something? Why is your stock trading this way?’ is really valuable.”
Remember Your Audience: What Investors Want to Hear
Regardless of industry, addressing the rapidly evolving ESG space has served as a master class in how to communicate with investors about change. For this reason, ESG investors have a unique perspective about which change messages ring true, and which ring hollow.
Jessica Butts, Principal at Toronto-based ESG Global Advisors, explains that a strong change initiative should be backed by a well-articulated strategy and by concrete actions.
“Investors, especially institutional investors, are far more savvy than they once were at reading between the lines when commitments are made as to whether there’s actually the strategy and governance behind the commitments to make them happen,” says Butts. She notes that the backlash against greenwashing has implications for the types of change messages that fall flat.
In the realm of environmental change, she notes that investors want to see a core set of metrics, starting with the disclosure of greenhouse gas (GHG) emissions. More convincing still is an announcement of actual dollars committed to making a particular change happen. Finally, an extremely strong change message is one in which executives allow their own compensation to be tied to hitting agreed upon metrics, she says.
Butts also notes that investors are increasingly attuned to consistency in messaging. For instance, it’s a no-no when companies regularly change the goalposts for the dates when they’ll hit certain ESG milestones. Investors, she believes, appreciate that “commitments today might not be as ambitious or as sexy as Net Zero by 2050, but they’re much more likely to be achieved.”
In the end, the best source of information about what investors want to hear in uncertain moments is investors themselves, concludes Thuot Kucyi.
“Ask investors: ‘What do you want to see?’ You’ll be surprised by how open they are,” she says. “Central to communicating about change is really listening.”