Concerns about the state of global stock markets remain today following ‘Black Monday’, which was fuelled by difficulties in China where the Shanghai Composite index closed down 7.6 per cent last night. The Dow Jones Index fell six per cent at its lowest point, although it closed at -3.6 per cent.
There was some more positive news this morning when markets in Europe rebounded a little, with the FTSE 100 up 1.6 per cent after falling 4.6 per cent on Monday.
However, there are still concerns about the state of the global financial markets, and PRWeek asked a number of PR professionals about how corporations should respond in times of volatility.
Instinctif's London-based managing partner Damian Reece said: "The management of public companies are paid to run those companies, not proffer their views on the vagaries of global financial markets. If there’s one thing guaranteed to irritate shareholders and customers alike it’s a chief executive who thinks they can call the markets, especially when they are moving dramatically up or down.
"Management who want to inspire confidence in times like these should insist on sticking to their knitting, refuse to comment on what they can’t control and highlight all the good things they are doing in areas they can directly influence. That’s what stakeholders want to hear.
"If you want to make a fool of yourself, commenting on the markets is a sure fire way of doing so. Do it on the record and your pearls of wisdom can be trotted out ad infinitum in months and years to come as you are consistently and comprehensively proved wrong, time and time again. What’s the upside?
"There may be a case for management at banks and other financial institutions that require specific balance sheet strength to offer reassuring noises when equity markets are tumbling. But unless required to by regulators, the downside of entering the debate about the value of financial assets far outweighs the potential upside and can lead to all sorts of unintended and unforeseen consequences in markets characterised by already nervous and jittery investors."
Andrew Hayes, chief executive of Hudson Sandler, said: "In more volatile markets, clients need to work harder to ensure that the fundamentals of their investment cases are not obscured. This may be focusing on technological advantage, market leadership, blue chip client base etc.
"They also need to be ahead of the curve in ensuring that markets understand any impact on performance to avoid unwelcome surprises that damage curability."
At one point on Monday shares in Apple were down six per cent, and its CEO Tim Cook took the unusual step of emailing CNBC presenter Jim Cramer to offer reassurances about its trading performance.
