Life as a public company will involve a certain amount of transition as you become used to what the market, media and regulations expect of you. There are several key challenges, including disclosure, annual reporting, investor and media relations, and not to mention regulatory compliance.
Public companies are obliged to keep investors and the wider market abreast of any information that may have a material effect on their share price. This is known as 'price-sensitive information' and can be difficult to define. In fact, knowing what is and what is not price-sensitive information (PSI) can be one of the greatest challenges that a newly public company faces. Some information is quite clearly price-sensitive; making a large acquisition, for instance. But what about a smaller acquisition? What if you are not going to hit your target revenues? What if the CEO is diagnosed with a serious illness? Your broker will be able to help you resolve many of these issues so do not be afraid to turn to them for advice.
Aside from the ongoing disclosure of price-sensitive information, you will be obliged to report on a half-yearly basis. On top of that, you will have to hold annual meetings to allow your shareholders to quiz you on your performance. There may be other times, for example when an Extraordinary General Meeting is called, when you have to meet formally with shareholders, too. These results announcements and meetings make up the basic financial calendar for your company. You know when they are going to happen so should plan carefully for them in advance. Work closely with your broker and financial PR advisers, particularly in your early days as a public company, to ensure that you are covering all the right areas at these meetings.
Successful public companies work at building their profile with the financial community and media throughout the year. It's all about relationships. Maintaining your profile after the flotation can be challenging - but it is crucial. So hire a good financial PR firm.
By this stage, you should be well aware of the corporate governance requirements that you have to meet as a public company. If in any doubt, check with your broker. You and your fellow directors will also have various obligations in terms of meeting the rules of the exchange or platform on which your shares are traded or those of the UK Listing Authority. Get a copy of all the rules and make sure you are familiar with them at an early stage.
"It's very different running a public company," says Alan Nicholl, CEO of Pentagon Protection, an AIM-quoted specialist in the supply and installation of enhanced glass protection. "The preparation and the attention to detail needed is a good discipline, and there are presentational and other benefits that can be applied to the business itself. Any director preparing for a public company life must be aware that it requires lots of senior management time."
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