Can you imagine having to deny that you’d ‘lost’ your company chairman? As outlandish as that might seem, it’s exactly the situation David Wu, head of IR at Fosun International, found himself in last year.
An anonymous article claiming the company had lost contact with its chairman Guo Guangchang went viral on Chinese social media in July 2017, slashing HK$10 bn ($1.3 bn) from the market cap overnight. But a robust media monitoring program combined with a crisis plan allowed the firm to respond fast and well, with a large-scale media strategy that limited the share price drop to just 0.17 percent by the next day.
Wu might not have been prepared for something quite like this, but Fosun is well armed and well prepared, he says. ‘Picking up this piece of fake news was simply part of our routine monitoring,’ he explains. ‘Fosun is an international company, with hundreds of subsidiaries and investments across the world. So inevitably, a global monitoring system is a core part of our tasks: anything that happens in Japan, Portugal, Luxemburg or even a small Chinese rural village could affect us!’
Since listing 10 years ago, Wu says the tech involved in media monitoring – and the level of monitoring needed – has changed completely. Back then, the firm relied on news database Factiva and had news clippings emailed over each morning.
‘Nowadays there are an unimaginable number of ecosystems that produce content (and sometimes fake content) every second,’ he says. ‘So the monitoring of online platforms and the integration of communications teams across the world has become a crucial part of our strategy; with anyone, anywhere, anytime having the ability to post negative news that could gain traction, we need a huge global network of eyes and ears to understand local news before and beyond the headlines.’
In addition to putting its own teams to work here, Fosun engages ‘a number of external vendors’. But Wu says it is working together that makes the real difference. ‘Working collectively as a group and having effective internal communications between teams is what really allows us to rapidly discover and assess the full impact of any news early on,’ he explains.
But even if you don’t have Fosun’s resources, ‘there are several existing tools that can accurately monitor and track conversations and mentions in real-time, most with the ability to track sentiment, multiple languages and follow the influence and life of any engagement,’ explains Lucy Cording, head of digital engagement at CNC Communications.
While not a new phenomenon, new technologies and the rise of social media mean fake news has become far more realistic, she warns: ‘New technology is helping to blur online news curators and traditional media companies, allow for sophisticated film and graphic editing tools and increase the speed at which information can be spread online.’
And of course, it’s not enough just to know what’s being said about you. You also have to have a crisis plan in place and be able to decide if, when and how you respond to fake news. It might not always be necessary to respond, Cording says, but this decision should be one that comes out of a process. ‘Evaluation and assessment are key,’ she emphasizes.
What it’s also all about is preparation – and that’s something Fosun takes seriously.
‘A company as large as Fosun must always be prepared for any crisis,’ says Wu. But Fosun didn’t have a specific plan for handling fake news. ‘What we did have was a crisis response infrastructure, so that when the event took place, every team in the company knew exactly what process to respond with,’ he adds. ‘All of our responses, including the live-streaming session to more than 50,000 viewers, were executed within hours of those decisions being made.’
Speed might be of the essence, but Wu warns other IROs not to rush their response. ‘One of the biggest mistakes made by companies when responding to crises is to act on incomplete information,’ he says. ‘This can in fact be even more disastrous – companies may end up talking about irrelevant things or the wrong things, or fail to really hit the right points at all. Before any response is given, all the factual and correct information should have been collected and discussed with all key internal stakeholders. The market might tut-tut at a slightly delayed response, but one wrong tweet can be far more damaging.’
It’s all about understanding the situation fully, Wu adds: ‘I’ve seen too many cases where people have acted hastily and then regretted what they said.’
Be prepared
Fake news should be handled like any other crisis, observes Lucy Cording, head of digital engagement at CNC Communications, who says companies should be following a scalable preparation process, including:
– Insights: ‘The establishment of online monitoring, dashboards and real-time alerts using secure third-party technology. This includes an initial online landscape analysis to identify current perception, sentiment, authors and key influencers in relation to the brand’
– Audit: ‘A thorough review of brand touch points to identify potential risks’
– Monitoring: ‘The development of a robust monitoring process to enable the identification and escalation of fake news if and when it emerges about your company. This can either be bolted on to existing monitoring processes or established as a personalized service based on the brand-specific risks identified. This will include the development of a reporting dashboard template and suggestions on who should be on the response team distribution list’
– Channel-readiness: ‘Preparation of owned channels including external and internal websites, social channels and community forums. This potentially includes the development of a dark site and securing of alternative domain names and even Twitter handles, a social policy and community management guidelines’
– Training: ‘Alongside media training for senior spokespeople, CNC recommends training a client’s social media community managers and content developers in identifying fake news’.
David Wu, head of IR at Fosun International, agrees. ‘Fake news and social media rumors present many new challenges – one social media post by almost anyone can snowball into something much bigger,’ he says. ‘Given that investors tend to sell first ask and questions later, IROs do not have the luxury of time on their side.’
He offers the following tips:
Understand that content (real or fake) can now be created anywhere: ‘Discussion forums and social media can never be neglected, and IROs must gain access to unofficial, on-the-ground information before it gains traction online or is picked up by the mainstream media’
Be interactive with investors. ‘To do this effectively, any monitoring strategy must be in line with how shareholders receive information and this depends on where a company is listed and where its shareholders are from. In China, for example, where we are seeing a lot of new buying, the media landscape is one of the most complex and fast changing. New stock commentating boards appear everywhere and key opinion leaders often have more influence than sell-side analysts. Due to this, Fosun has a dual PR-IR strategy for China vs international markets, for example.’
Be proactive with the Street: ‘In a post-Mifid world, IROs must have a much more engaged relationship with Street. Gone are the days when an IRO could simply rely on corporate access teams to sort out meetings. In my opinion, I think this actually forces IROs to be more proactive, and really get to know the investors better.’
This article first appeared in the summer 2018 issue of IR Magazine