Published On: February 6, 2024Categories: Investor Relations, shareholder communication, StrategyTags: 2.1 min read
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As artificial intelligence (AI) continues its relentless march forward, its ability to generate synthetic media and content has raised serious concerns. The potential for bad actors to leverage these technologies and manipulate markets is genuine. While African capital markets have not yet seen significant fake news and misinformation issues, the writing is on the wall.

Misinformation powered by AI is already being seen as one of the biggest threats of 2024, according to the World Economic Forum. As technologies for generating fake images, videos, and text reach new heights in realism, efficiency, and accessibility, they can be weaponised to erode public trust and manipulate perceptions.

Stock markets everywhere rely intrinsically on public trust and confidence. If that erodes, markets can be significantly disrupted.

While direct manipulation of stock prices via fake news has not emerged as a major issue in Africa, that could change quickly as markets become more liquid. It has become cheaper and easier to manipulate media and harder to identify manipulated media in the modern information environment, so, without vigilance, this could open the door to fake news being used to manipulate share prices on African exchanges in the future.

Listed companies on African exchanges need to prepare now for this coming storm.

The Importance of Trustworthy Communication

The best defence listed companies have is open, honest, consistent and persistent communication directly with stakeholders. Trust will be fostered by building durable two-way connections with stakeholders and diligently publishing accurate, contextual information on company activities, performance, strategy, and sustainability initiatives.

Feeding stakeholders reliable information directly from the source inoculates companies against the reputational risk of false information.

Formal communication policies governing press releases, financial reporting, ESG disclosures, investor relations, email newsletter publications, and mobile apps are essential tools companies need to leverage. Carefully crafted messaging aligned to globally accepted disclosure standards like GRI Principles will instil confidence in the quality and integrity of communications. This consistency, reliability, and transparency will be the bedrock of reputational risk management.

Our listed companies have a way to go yet to mitigate these risks fully through formal communications policies and practices. The good news is that we know the unknowns.

In an information environment flooded with competing voices, stakeholders need corporate communicators to be that “reliable antenna” – a trusted source of truth. African-listed companies that build bridges of trust now with stakeholders will fare far better when the winds of fake news eventually arrive. Fortune favours the prepared, and preparation must begin today.

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AfricanFinancials works with Boards, CEOs and companies who want to build sustainable businesses through better corporate and investor communications. Our focus is online investor relations to promote secure two-way communications with investors and stakeholders.