Valuation volatility is often attributed to earnings misses, macro shocks, or sector re-rating. In practice, perceived deviation from an established narrative can be just as influential.

Investors tend to react strongly when outcomes appear misaligned with prior communication, particularly if the shift is not clearly articulated. A change in strategic emphasis, capital allocation, or risk posture is not inherently harmful. What unsettles markets is surprise.

This is why questions raised during earnings calls frequently reference earlier statements rather than current numbers. Investors are not only asking what has changed. They are asking why it was not anticipated, flagged, or explained earlier.

Such moments do not necessarily indicate that management was unprepared. More often, they reflect a communication gap between how management experienced change internally and how investors encountered it externally. Markets respond to that gap, sometimes through sentiment, sometimes through price.

Most investor communication frameworks are built around dissemination. Management prepares disclosures, delivers messages, and responds to questions. Listening, while acknowledged as necessary, is often treated as secondary, mainly confined to earnings call Q&A or selected investor meetings.

This creates an imbalance. Communication becomes output-driven rather than dialogue-driven. The assumption is that clarity of explanation is sufficient, and that interpretation will naturally align.

Investor communication is incomplete without systematic listening. Investors form perceptions not only from what is said, but from how it connects to what they already believe and remember. When these perceptions diverge from management intent, disclosure alone does not resolve the issue. Engagement with interpretation does.

Listening in this context does not mean agreeing with investors. It means recognising how messages are received, where confusion persists, and which concerns recur over time. Respect in communication begins not with explanation, but with acknowledgement.

This imbalance is most visible among companies with lean investor relations structures, where communication is often driven by dissemination rather than interpretation. Newly listed and small-cap companies tend to prioritise explaining results over understanding how they are perceived. Without a structured mechanism to capture recurring investor questions, shifts in sentiment, or points of confusion, management may believe it has communicated clearly even as investor understanding diverges.

Communication research offers a valuable lens to understand why this imbalance persists. Deborah Tannen’s work on conversational dynamics distinguishes between different communication orientations, none of which are inherently superior, but each of which suits different contexts.

One distinction she draws is between “report talk” and “rapport talk.” Report talk prioritises information delivery, authority, and clarity. Rapport talk focuses on shared understanding, connection, and alignment. Corporate environments have historically rewarded report talk, valuing decisiveness, precision, and control of messaging.

This orientation is practical for execution and governance. However, in investor communication, it can crowd out the interpretive and relational elements required for alignment. Investors may understand the information but still feel that their interpretation has not been acknowledged.

Tannen also distinguishes between high-involvement and high-considerateness communication styles. High-involvement communication is fast-paced, assertive, and information-dense. High-considerateness communication places greater emphasis on pacing, space, and responsiveness to cues. Investor engagement often benefits from the latter, particularly when addressing uncertainty or change.

The issue is not that corporate communication adopts the wrong style. It is that one style dominates where balance is required.

Consistency in communication does not mean repeating the same message indefinitely. Businesses evolve, strategies shift, and external conditions change. Investors understand this.

What they expect is continuity of explanation. When narratives change, the transition must be articulated. When priorities shift, the rationale must be connected to earlier statements. Consistency lies in logic, not language.

Companies that manage this well rarely eliminate volatility. They do, however, reduce unnecessary volatility driven by misunderstanding.

Investor communication matures when it moves from dissemination to dialogue. This does not require more disclosure. It needs better integration between what is said and how it is received.

Markets have memory. They remember narratives, not just outcomes. Management does not need to carry that memory alone, but it must recognise that it exists.

The most credible companies are not those that never change their story. They are those who deliberately change it, explain it clearly, and listen carefully along the way.

In investor relations, speaking well matters. Listening well matters more.

Companies that manage investor communication effectively tend to treat listening as a continuous discipline rather than an episodic activity. This is particularly important for issuers in the early stages of their public market life, where narrative frameworks are still forming, and investor expectations are less settled.

In practice, institutional listening begins with tracking investor questions over time rather than treating them as quarter-specific exchanges. Recurring themes are reviewed not as repetitions to be managed, but as indicators of where narrative clarity may be incomplete.

Effective teams also review investor feedback alongside financial performance, recognising that outcomes and interpretation do not always move in tandem. Where interpretation diverges from intent, disclosures are refined to address the gap rather than restate results.

Before results are communicated, changes in emphasis, priorities, or outlook are tested against prior statements to ensure that evolution is explained early and coherently. Over time, this discipline reduces surprise, strengthens trust, and allows companies to communicate change without destabilising credibility.

For many issuers, especially smaller or newly listed ones, this capability is not intuitive. It is built deliberately, often with structured external support, and refined through repeated engagement with market feedback.

Markets do not reset their expectations every quarter. They carry forward what management has said, how it has responded to questions, and whether changes in direction have been acknowledged with clarity and respect. For companies navigating the early years of public market scrutiny, this accumulated memory can shape valuation outcomes far more than any single set of results.

Effective investor communication, therefore, requires more than accurate disclosure. It requires institutional listening, narrative continuity, and the ability to translate feedback into more precise explanations over time. Companies that recognise this early are better positioned to build durable investor trust. Those who learn it later often do so after credibility has already been tested.

At Dickenson, we work closely with newly listed and small-cap companies to help institutionalise this discipline early in their public market journey. Our approach focuses on building structured investor communication frameworks that integrate disclosure, interpretation of feedback, and narrative continuity across earnings calls, investor materials, and ongoing engagement. By helping management teams listen systematically to how markets interpret their messaging and align communication with evolving expectations, we support issuers in reducing surprises, strengthening credibility, and building investor confidence over time.