🗳️Earnings on Election Day

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CEOs have been keeping their heads down as Election Day nears, but quarterly earnings often require them to come up for air and address investors and the media.

Why it matters: During this quarter's earnings calls and the press interviews that follow, executives could be forced to discuss the election, its outcome and any uncertainty surrounding it.

The big picture: According to a JP Morgan report, traditionally markets are volatile ahead of a presidential election but level out once a candidate has been chosen.

• This year, however, mandatory recounts could delay results, causing a longer stint of indecision that executives on the earnings media circuit might have to address.

Between the lines: The only thing investors dislike more than bad performance is uncertainty, says Alex Jorgensen, head of investor relations at Prosek Partners.

• Because of this, the election has become a consideration in this earnings cycle. "When you factor in what happened last [presidential] election or even two elections ago, just because you have the results of the election, doesn't mean the uncertainty goes away," Jorgensen said.
• "Regardless of when you report earnings, you need to have a prepared suite of communications and talking points for the full range of scenarios that may play out next week," he added.

What they're saying: "The conversations that I'm having with CEOs and heads of comms are about what happens the day after the election or in the weeks after if there's an unknown outcome," Shallot Communications co-founder Teal Pennebaker told me at the recent Mixing Board Live conference in Austin, Texas.

• "Several are very concerned about what if there's another Jan. 6? What is our role in corporate America when it comes to democracy? Do we take a stance? Is that political? Do we need a democracy to function in order for our company to do well?" she added.
• These are the types of questions executives should prepare for should the era of election uncertainty extend beyond Tuesday.

What to watch: While a few business leaders have come out in support of a particular candidate, for the most part, corporate America has been quite guarded.

• If questions about the election reach a crescendo affecting employees, shareholders or business operations — particularly in swing states — companies may have to respond.
• You'll likely see diplomatic reactions from executives, most of whom will try to convey to the business media and shareholders that their companies will be able to work with either administration, regardless of the outcome.

Companies are not only strategizing about addressing the election results, they also have to consider whether their news will break through the crowded news cycle. 

• Reporting on Election Day is not necessarily a pro or a con — it's a reality. So communicators can use this reality to bury the ho-hum or even bad news.

Reality check: Regardless of when earnings are scheduled, a company will have to answer to investors and be prepared to discuss its performance and the impact the election outcome has on the business.

Zoom in: More U.S. companies are reporting earnings the week of the election and in the week that follows compared to past cycles, according to an Axios analysis.

What to watch: Troubled companies have a history of reporting earnings around election day.

• And this cycle, companies like CVS Health, AMC and Bumble are reporting the day after the election.

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Corporate board members are very concerned about societal and political issues, but they aren't regularly discussing these topics in the boardroom, according to a new report from PricewaterhouseCoopers (PwC).

By the numbers: PwC surveyed 527 directors this spring and found roughly 6 in 10 have not discussed their companies' stances on social or political issues.

• Larger company boards are more likely to discuss political and social policy issues because they are more likely to become targets of public scrutiny and pressure, per the report.

Of note: ESG has come under political fire in recent years, yet only 47% of the directors surveyed say ESG is regularly part of the board's agenda — down from 55% in 2022.

• 66% say ESG means different things to different people and 58% say it is not consistently understood by their board members.

Yes, but: Just as with social and political issue preparedness, directors from the largest boards are more confident in understanding ESG and more likely to see its impact on company performance, according to PwC.

The big picture: Most corporate affairs and communication teams have formalized procedures to help the company determine when and how to respond to outside political, social or cultural issues.

• Increasingly, both boards and employees are being informed of this evaluation process.

What to watch: Board members are doing more scenario planning regarding how a new administration might impact a business' ability to operate, says Ray Garcia, PwC governance insights center leader.

Go deeper ... read the full report.

More than two in three CCOs say their organization invests more in environmental initiatives than they talk about publicly.

But consumers want to hear more.

Sign up to get the latest from Page to learn how to bridge this gap and effectively talk about your climate efforts.

I'm often asked which executives I watch most closely for comms lessons, and my list typically includes Lyft's David Risher, Spotify's Daniel Ek, Blackstone's Jon Gray and GM's Mary Barra.

• There's another executive who's recently caught my attention: Brian Niccol of Starbucks.

Why it matters: Niccol, who was brought in recently to help Starbucks bounce back, has been relying on proactive comms to help build confidence and articulate where the coffee chain is headed.

What he's saying: Ahead of this week's earnings call, Starbucks released a video preview from Niccol, in which he addressed the company's issue areas head on and shared how he plans to course correct.

• The quarterly "performance makes it clear that we need to fundamentally change our strategy so we can get back to growth," Niccol said.

❓Which executives do you follow? Who else should I pay attention to? Let me know.

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A few months ago, we examined how CEOs were getting creative when communicating quarterly earnings.

• This week, Google CEO Sundar Pichai posted an X thread following his prepared remarks that sprinkled in images and digestible facts for digital audiences.
• As one analyst put it, investor relations doesn't have to stay in the dark ages.

Go deeper... The evolution of communicating quarterly earnings.

More than two in three Page members plan to implement initiatives to reduce environmental impact in the next two years, according to a recent survey.

Take note: The survey reveals how companies can discuss climate with consumers and stakeholders in a low-risk way.

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☀️ Thanks to editors Nicholas Johnston and Kathie Bozanich. And thanks to you for reading along.

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