As a pimply 20 year old, I was introduced to the world of investing by Warren Buffett, the Chairman of Berkshire Hathaway and one of the most renowned value investors.
In his authorised biography Snowball, the funniest moment came when he mentioned how he was reading Annual Reports on his honeymoon. He would lug them in his car. After the day’s activities were over, he would read them.
It made me think about what it was about these annual reports that made it so interesting to read, especially if you saw the ones in Singapore.
As a capital market, Singapore can seem horrible at communicating the views of the Chairman, especially if you read the statements at large-cap companies.
Compare that to how lucid the thinking is at the likes of Amazon, Google and Berkshire, and you might be forgiven for giving those a miss.
But there are still some good ones to be found.
Let me share what those are, and the lessons we can take from them.
Because yes, we’ve been there. When you have to write a statement that encapsulates everything the organisation has done, and you wonder how best to do it.
Of course, there are some Chairmen who are so involved that they refuse to delegate the writing process. You can tell it from how they write, using the first person ‘I’ or the second-person ‘you’, rather than a variety of third-person pronouns.
This article is thus split into two.
The part where you’re writing when you are the chairman.
The next is if you’re not the chairman, and you’re the one who’s had the unfortunate task of having to write it.
Most chairmen won’t have the time. They might delegate it to you, the corporate communications specialist.
You’re not the Chairman
So, how do you write a Chairman’s statement that inspires, and doesn’t just do the job of filling text on a page, whilst not sounding too illogical.
Try this.
Interview the Chairman for some guiding points
Whilst you might be the corporate communications specialist, you might not be the expert at the business. That’s where you have to get the Chairman’s input on how he sees the business.
Most statements start with an idea of what the major highlights of the year have been. Then they explains why this is the case.
If you’ve had an exceptionally profitable year, why has that happened?
Some questions which are vital:
You are the Chairperson
Of course, if you’re the chair, you’ve your work cut out for you.
Not just because you’re paid thousands to think.
It’s because you’re valued for your leadership of the company.
The Chair explains the why of the work
As the Chairman of the SGX (or the Singapore Exchange), Koh Boon Hwee, who became Chair on 1 January 2023, did a phenomenal example of why the SGX’s work was so important.
Some may argue that the stock market is only one aspect of our financial ecosystem,
but it is more like a pillar.
And we should recognise that if this one pillar were to falter, the whole is put at risk.
His statement did a great job of explaining how businesses went from o to 1, through the entire liquidity cycle, from having an idea, to finally finding an exit for investors.
His shows that great statement start from great thinking, and reasoning from first principles. Again, there’s no easy way to do this, but take time to think why the work you’re doing is important, and cannot be replaced. Because if you can’t explain that to yourself, then you might have an even harder time explaining to investors why they should even invest in your company.
But the question at the tip of your lips is no doubt,
how can you think of something visionary, that makes people sit up and notice?
When I used to sit on the Board of Directors at the University of Nottingham’s Students’ Union, our union was struggling with a decrease in the grant, which would severely affect our finances. For months, we struggled with thinking through how to navigate this crisis.
To better guide the Board, I kept taking time out to think. I would go on long weekend retreats to Lancaster, walk by the parks, and then think.
To come up with something great, you need time to think. And when you’re in the middle of busy Singapore, there’s often no time to think.
So take time out to think.
Connect it to something larger than your company
Some of the best Chairman Statements have connected the narrative to a larger national story.
With SGX, Chairman Koh argued that
a vibrant and liquid stock market is vital to securing Singapore’s continued success as a global financial centre.
It wasn’t just about capital. Rather, it was about Singapore’s continued standing as a financial centre. Now, that’s a bigger purpose than just saving or making more money for the company.
Stick to who you are
Some of the best Chairs are those who know their strengths, and consistently stick to them.
Peter Seah, who retired as CEO of Overseas Union Bank, (and continues to chair DBS Bank) has been known in the industry for being strategic and sharp with his thinking.
He’s never departed from that, even though his role as Chairman of Singapore Airlines today might call for more experience with branding or crisis management.
He’s never swayed to the crowd’s expectations of what is expected of SIA. He’s instead continued keeping his eye on the horizon and being clear-eyed in what needs to be done.
Even when crises have happened, like the pandemic, and the most recent SQ321 flight which resulted in one fatality.
For example, even though the pandemic saw many airlines cutting down on capacity, Peter Seah kept ensuring that SIA was the first out of the blocks, and could recover as soon as possible, when the travel boom returned.
On the other end of the spectrum are extremely enigmatic chairs like Avarga’s colourful Tong Kooi Ong. His son, Ian Tong, the current CEO, has also followed in the footsteps of his father, taking an honest approach to shareholder communication.
In 2023’s report, he shared from the heart as he explained why profits had declined by 64% to S$39.1 million in 2023 from S$109.9 million in 2022.
He’s gone to efforts like restating the company’s earnings, to better reflect how the capital has been deployed.
Sticking to who you are in a capital market that may react quickly and aversely to bad news, is hard.
But it’s necessary to help you to continue preserving the congruence between who you are as the Chairman, and what your company stands for.
Behind every company are people.
Many companies make the mistake of communicating company to reader, rather than person to person.
Do that, and you can be sure that shareholders will begin to trust you more.