Managing as a public company

What are some of the ongoing tasks to manage now that you’ve successfully executed an IPO?

1. Investor relations

One of your most important tasks as a public company is to keep investors interested and satisfy their requests for information. Your company will be under ongoing pressure from both analysts and investors, but you should be cautious about how you release information. Analysts can be your link to investors, so you’ll need to be ready to deal with their requests and ensure you comply with full disclosure regulations.

It’s important to have people who understand investor relations carefully manage the process on an ongoing basis. You may want to look at hiring an investor relations manager on either an in-house or contracted basis to help ensure you’re projecting a strong and consistent image. Don’t overpromise and underdeliver. Ensure investors understand your investment proposition and the factors and risks that influence your business decisions. But also make sure you’re meeting enough of the right type of investors.

2. Continuous disclosure:

The four aspects of continuous disclosure:

Transition and adjustment

You’re now into reporting to a new group of stakeholders and will need to balance short-term market demands with long-term company objectives. Keep in mind that it may be difficult getting accustomed to working under a microscope.

Public accountability

It may seem that your new public company has become an information machine. You’re now regulated under disclosure requirements to continually disclose timely and accurate information about your operations and financial results.

Perpetual three-month calendar

One of the major challenges you face as a public company is resetting the company clock to a three-month time frame. These ongoing requirements make it critical to have strong financial reporting systems and the right people in place to deliver timely, complete and accurate reporting.

Timely disclosure

Reporting happens more than four times a year. You must also disclose all news that materially affects the company as promptly as possible—which means as soon as you have the full details and are satisfied they’re reasonably accurate. Generally, you have 10 days to issue a press release announcing any material change.

Considerations for continuous disclosure as a public company

  • Are you ready for internal control compliance from the first day?

  • Do you understand your financial reporting deadlines?

  • Do you know what your peers disclose and when?

  • Can you adapt quickly to changes in rules and accounting standards?

  • Do you have a framework for ongoing training and development of staff?

  • Are you delivering against IPO promises?

  • Are you ready for sustainability reporting?

  • Is senior management actively involved in managing the share price?

3. Public filings

These are the reports, forms, statements and other documents that you must make publicly available after the IPO. With financial statements and management discussion and analysis (MD&A), there are different requirements for non-venture and venture exchanges.

Non-venture exchanges (the TSX and NEO) require annual audited statements within 90 days of each financial year and quarterly statements within 45 days of the end of the quarter. You must file an annual information form each year. Venture exchanges (the TSX-V and CSE) require annual audited statements within 120 days of each financial year and quarterly statements within 60 days of the end of the quarter. An annual information form is filed on a discretionary basis.

Other public filings include:

  • Press releases: Required immediately upon a material change (a material change report is required within 10 days)

  • Selective disclosure: Prohibited under Canadian securities law under insider trading and tipping laws

  • Material information: Required disclosure for all material information

  • Information circular: Prepared and sent to shareholders in connection with the solicitation of proxies for a meeting of shareholders

  • Business acquisition report: Required filing for completing a significant acquisition

4. Certification compliance

As a new public company listed on the TSX or NEO, the CEO and CFO must comply with National Instrument 52-109, which includes quarterly and annual certifications. They must certify that they:

  • appropriately designed disclosure controls and procedures (DC&P) and evaluate operating effectiveness on an annual basis

  • appropriately designed internal control over financial reporting (ICFR) and evaluate operating effectiveness on an annual basis

  • disclosed in their MD&A the conclusions stemming from the evaluation of the effectiveness of the DC&P and ICFR, any material changes relating to the ICFR and any material weaknesses relating to the DC&P and ICFR

  • disclosed any fraud involving management or other employees playing an important role in connection with financial reporting controls to the auditor, board of directors or audit committee

5. Internal controls

Compliance timelines following a public listing (DC&P and ICFR):

  • Bare certificate (IPO/reverse takeover): first quarter following a public listing
  • Design effectiveness (interim full certificate): second quarter following a public listing
  • Design and operating effectiveness (annual full certificate): first year end following a public listing and bare certificate (if the bare certificate is the fourth quarter, annual certification is only required at the next year end) 

6. Transparency and corporate governance

While internal controls often focus more on transactions, it’s also important for the board to have corporate governance policies. Is there an insider trading policy? Is there a formal process to delegate authority? Are there approval limits that delegate authority from the board to management? How will you keep shareholders updated on corporate governance matters? These questions are essential in the ongoing operations of your public company.

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Geoff Leverton

Geoff Leverton

Partner, National Capital Markets & Accounting Advisory Services (CMAAS) Leader, PwC Canada

Tel: +1 416 815 5053

Paul Feetham

Paul Feetham

Partner, Capital Markets & Accounting Advisory Services (CMAAS), PwC Canada

Tel: +1 416 365 8161

Matthew Fuller

Matthew Fuller

Partner, Capital Markets & Accounting Advisory Services, PwC Canada

Tel: +1 403 509 7341