How public company CEOs Build Trust With Investors

Profiling UK Public Leaders, Episode 8

Stefan Bernstein is a geologist who spent most of his career in research and government, latterly running a department at the Geological Survey of Denmark and Greenland. Three years ago he became CEO of GreenRoc Strategic Materials, developing a graphite project in southern Greenland.

His candid observation is that he is running two businesses. The technical side comes easily after thirty years around Greenland's geology. The plc side is the steep learning curve, and it takes more of his time than the mine does.

"You'll never regret taking the money now"

The worst advice Bernstein has received is that you should always take money when it is offered. He disagrees, and his reasoning is about who is offering it.

An investor with no intention of staying can take a placing and sell straight out, leaving the share price lower, existing holders angry, and the next raise harder. He has resisted money on those terms more than once and says it has played out well. The best related advice he picked up: time your raises for when the market least expects them, which is only possible if you are not raising under pressure.

Set expectations you can actually meet

A developer will go through many raises before it produces anything, and Bernstein's view is that hiding this helps nobody. Some investors genuinely believe one raise gets you to a built mine. Letting that belief stand feels good at the moment of the raise and costs you afterwards.

His discipline is to describe exactly what the journey looks like, deliver what was promised even when it takes longer, and refuse to put out announcements with no substance just to show signs of life. He would rather the market know that news from the company is always worth reading.

The wedding tax

Bernstein's sharpest warning for new small-cap CEOs concerns the service industry that surrounds them. There is, in his experience, a swarm of providers preying on listed companies, offering gadgets and exposure that will not change the share price or reach a single investor who matters. If something sounds too good to be true, it is, and plc land presents a lot of too good to be true.

His filters: work out which services are essential and which are just an expense, do more yourself than feels natural, and lean on board members who know public markets, because in a company with a handful of staff they are the experience you cannot hire.

Make investors part of it

What has worked in raising is unglamorous: a core of investors who took the trouble to understand the project, kept informed and treated frankly, who anchor each raise. New investors arrive unpredictably, mostly through brokers, sometimes through the board's connections, so the strategy is to keep every door open.

His broader instinct is that the direction of travel is toward more communication, and more human communication. Investors are tired of polished marketing. They want to understand what a company is doing and feel part of it, and the ones who do, he finds, stay longer.