It has been an eventful 2017 so far for Aimia, the Montreal-based marketing and loyalty scheme company behind Nectar points – and for its IR team. In an interview with IR Magazine, Karen Keyes, senior vice president of IR at Aimia, talks about how the company has handled a hectic few months.
In January, the firm announced that then-CEO Rupert Duchesne was taking a four-month leave of absence for medical reasons, which ultimately led to him leaving the company permanently. Aimia appeared to have taken the leadership change in its stride. Between January and April, its share price rose steadily above 2016’s performance.
But then in May, Air Canada announced that it would be parting ways with its Aimia-administered loyalty scheme in 2020, prompting a 76 percent fall in Aimia’s share price over the following two weeks.
As of May 26, Keyes had fielded more than 40 investor calls about the Air Canada news. She declined to comment on the company’s prospects, but Aimia’s new CEO David Johnston has been reported as calling the market’s response an ‘overreaction,’ and as saying Aimia that had anticipated the news and is working on alternatives.
Although Keyes had experienced successions before, this one was different. The nature of the transition meant there wasn’t much time to plan a communications strategy, she says. Her team looked for other examples of unexpected CEO absences, particularly at how CN handled a similar situation in 2015 to 2016. ‘We had to think very quickly about what mattered and how to position it,’ she says. ‘There’s a balance between protecting a person’s personal life and also respecting that they’re the CEO of a public company.’
The company announced on January 19 that Johnston, then COO, would be taking over as interim CEO, and that company chair Robert Brown would be executive chair during the transition to give investors another point of contact. The company also announced the duration of Duchesne’s leave of absence in its press release, but nothing else related to his circumstances. ‘We didn’t want to say anything about the medical condition because we didn’t want to get into a selective disclosure situation,’ Keyes says.
She praises the company’s board, which had been grooming Johnston as a potential successor before it had any knowledge of Duchesne’s health concerns. Johnston had also attended investor meetings in the past. ‘The board was very conscious that IR is part of the CEO’s job and it was part of their succession planning,’ Keyes says. ‘It’s so important that boards take succession planning seriously.’
Even though Johnston had had this exposure, there was still a lot of behind-the-scenes work required to prepare for the company’s Q4 earnings release. The company had one month to cover a range of operational and governance issues.
‘Who signs the accounts heading into earnings? Is he [Johnston] sitting on other boards? Is he able to come onto our board? We spent a lot of time with lawyers working on corporate structure. These aren’t the standard questions that you get in the IR playbook,’ Keyes says.
Following the earnings release, the IR team was able to think about which investors Johnston still needed to be introduced to. Not long after that, on May 10, he was announced as the permanent CEO.
Inevitably, he and the company will be judged on how they respond to the Air Canada news, with some commentators reportedly backing the company for a rally in share price. But it’s also easy to imagine a situation where the consequences could have been greater for the company, had the board not put together such a robust succession plan.
