In mid-May, Velocity Financial Inc. announced steps taken to counter the economic turmoil caused by the coronavirus outbreak. They included suspension of loan origination activities and placing the loan origination staff on a 60-day furlough. The Westlake Village commercial mortgage lender also communicated its uncertainty about how to navigate the pandemic. “While it is still too early to accurately predict the ultimate impact of this health crisis on the economy and Velocity’s short-term operations, we are positioning the business to thrive in the long term,” Chief Executive Chris Farrar said in a statement. Velocity, No. 24 on the Business Journal’s list of Public Companies ranked by market capitalization, is not alone in acknowledging the guesswork involved in developing a pandemic strategy and communicating it to investors, employees and customers. For example, Cheesecake Factory on March 23 announced that its restaurants “have a long-standing business in the off-premise channel, which enabled a quick pivot to an off-premise only operating model in all open restaurants as required by state and local officials.” Although it closed 30 locations, it said the open restaurants “are operating sustainably at present under this model.” But less than a week later, the company notified landlords it wouldn’t pay April rent. And in a Securities and Exchange Commission filing, it said it would furlough 41,000 employees. “While the duration of COVID-19 and what the reopening of the economy will look like remains uncertain, we look forward to getting our affected staff members back to work as soon as practicable,” Chief Executive David Overton stated in a preliminary quarterly report on May 5. Cheesecake Factory ranks No. 17 on the Business Journal list. Roger Pondel, chief executive of Woodland Hills investor relations and strategic public relations firm PondelWilkinson Inc., said that the ambiguity of the economic mess left by COVID-19 makes it “impossible to predict and dangerous to predict” what a company’s financials will look like. While Cheesecake and others have stopped issuing guidance for upcoming quarters, investors still want to know what is going on, Pondel said. “It is important to be transparent and to be very forthright on the quarterly calls,” he explained. “Try to breathe some life into the quarterly calls so that investors have confidence.” Being honest in communications with not just investors but also employees, customers, vendors and suppliers was something that Robert Krol, an economics professor at California State University – Northridge agreed on. He thinks that being direct, factual and honest about the difficulties facing a business is the best way to go. “I don’t think that would surprise anyone,” he added. “I don’t think any investor would be surprised if a company says that it is not certain about growth prospects.” Faceless corporations Perhaps the biggest communications challenge facing public companies during the pandemic is that of no face-to-face meetings, Pondel said. The non-deal roadshow where company executives would travel to meet with investors and analysts has been suspended for the time being. Instead they hold these meetings via Zoom or other video conferencing platforms. It is something that he has heard that executives like, Pondel said. For one, they don’t have to leave their offices or their routines. Another is that it cuts down on expensive travel, he added. “Is it the same? No. You cannot see body language as well,” Pondel said. “Some investors are telling us they really would like to shake hands and look at that body language in an in-person meeting, but it does not come across on Zoom. But there is no choice right now.” For companies, video conferencing is a tool that is in use every day, Pondel continued. But if you put four or five people on a Zoom call, it creates a whole different dynamic than if the meeting took place in a conference call using just the phone, he added. “I have a feeling that the use of video is going to be a permanent change in a lot of ways,” Pondel said. “In annual meetings, in roadshows, in other areas of other communications, I think it is going to be one of the biggest permanent areas of change.” Most public company annual meetings have been audio only, so you cannot see anything or anybody, Pondel continued. “The meetings tend to get boring in general, unless the CEO and CFO are really energetic and great presenters,” he added. What public companies need to do is stay in front of their investors as much as possible, he advised. “The out-of-mind, out-of-sight syndrome could easily take hold, but it is critical during a time like this that it does not,” Pondel said. Krol, from CSUN, said another consideration that public company executives are going with is forecasts in the media that speculate about the type of recovery that will happen and whether it will be fast or slow. “The reality is forecasting is always tricky even in the best of times,” Krol said. “Right now it is highly speculative.” And the uncertainty levels in the forecasts are huge, he added. Part of that uncertainty is not just the traditional anxieties about sales and whether a business need to lay off staff, but also in terms of policy and what the federal, state and even county governments will do. “That type of uncertainty is as troubling and difficult for businesses as the traditional uncertainty,” Krol said. “I would just communicate that as directly as possible.” Krol thinks public and private companies are going to pull back and hold off on hiring and investing in infrastructure and new equipment. The risks and returns on hiring and investment are just so uncertain that they will have to hold those decisions, Krol said. “There is value in waiting at this point in time,” he added.