This article was originally published on Forbes.com on September 13, 2023
RACHEL KULE, PURSUIT PR
Forbes Councils Member
As U.S. markets show signs of a strong finish to 2023, companies eyeing a public listing are going to need to stand out from the increasingly crowded pack. For executives, that means doubling down on their corporate and brand equity. Effectively communicating a robust environmental, social and governance (ESG) program, as well as staking out ground on corporate reputation and culture, will go a long way to attracting that vaunted capital.
The upswing in listings is evident with 55 companies achieving a successful raise so far this year versus 71 U.S. IPOs for all of last year. And they’ve raised nearly $10 billion already, 25% more than 2022’s total of $7.7 billion.
While there are still significant economic uncertainties, including when the Fed will stop raising rates to tamper inflation, companies seeking a public listing will need to have more than their numbers in line and compliance boxes checked.
As billionaire investor Mark Mobius recently said during an interview at the Greenwich Economic Forum in Hong Kong, ESG and “C”—corporate culture—feature prominently in his evaluation of a company’s prospects. It’s not just about return on equity, future projections and competitive outlook anymore. And standard metrics like backward-looking price-to-equity ratios are completely out of his picture.
So how does a company communicate these metrics that often defy simple numeric calculations? Establishing and maintaining a solid corporate reputation remains first and foremost the key differentiator.
Corporate reputation is how the public—and increasingly investors, business partners and their own employees—perceive the company. Stakeholders want to know more than just what a company stands for in terms of its mission, vision, and values, but how it relates to creating a positive work environment and improving the world we live in. Their interests include the overall brand, products, and services, as well as how corporate activities impact the environment and work conditions.
A strong C-suite communications strategy not only articulates these points, developing goodwill in the process, but also generates positive brand awareness and industry relevance. The “chief reputation officers” of the Company (the C-suite) have a major role in establishing and maintaining this reputation.
Internal and external surveys are a common way of assessing reputation. Increasingly, however, taking the pulse of public opinion through advanced open-source analytics provides a richer and wider view of what is being said, by whom and how much it matters. Rather than taking a snapshot in time, ongoing monitoring can expose sudden changes in sentiment, especially as a public listing nears.
On the ESG side, policy statements are no longer enough to establish a firm’s integrity in markets and stakeholders. Specific actions that highlight how a firm deals with the worsening climate crisis, improves peoples’ lives, betters society in meaningful ways, creates a more inclusive work environment and highlights how they govern corporate affairs all need to be clearly expressed.
Addressing how a firm’s programs avoid greenwashing of environmental efforts, for example, is a good way to establish credibility. Active outreach on social and workplace issues, with concrete examples of how the firm overcame challenges and succeeded in meeting its goals, will be instrumental in building trust and confidence.
Communicating succinctly, in the right venues, at the right time, provide the best chance for building engagement as a funding event approaches. This can include the quality of newsletters, increasing earned and owned media presence, and expanding executive thought leadership programs to increase visibility and establish industry eminence.
While compliance remains the foundation for any capital raise, brand and corporate equity is the structure built on top of these core financial and business processes. In an interconnected world where information travels instantly, that equity is more valuable than ever.
EGCs (emerging growth companies) with reputations of consistently stellar culture and bulletproof street credibility are best positioned. Those that focus on these core issues now will stand out against their peers in the race to grow market share and new customers.