Develop your stakeholder story, plan your messaging and align internally
So what are the vital elements that sit at the heart of an effective IR strategy?
‘Given the increased number of firms followed by investors, it is vital to have a clear and compelling story,’ advises novobanco’s Maria Fontes. ‘Keeping it simple and focused while improving disclosure in an understandable manner helps investors track the execution of a company’s goals, while building credibility and long-lasting relationships with them.
‘Keeping it simple is not always easy, but the strategy and its communication needs to be understandable by all stakeholders, whether they be clients, employees or investors. It’s important to consider a range of factors, such as the various communication channels that can be used in a more flexible manner to capture the attention of different audiences.
The investment thesis should be somewhat evergreen
‘Keeping costs under control is often an active constraint, so it is also about planning marketing activities in order to reach the goals, defining communications channels and identifying tools needed to continue to innovate and be more efficient, whether for targeting investors or optimizing internal processes.’
For Rebecca Gardy of Campbell Soup Company, building and nurturing relationships with both internal and external stakeholders is a critical component of IR strategy success, as is clear and regular communication.
‘Internal stakeholders should understand the external expectations of the company’s performance and how their work is tied to achieving the firm's long-term strategic plan,’ she explains. ‘External stakeholders – principally investors and analysts – should receive clear and transparent communications at a consistent cadence. Active engagement through press releases, calls, meetings and conferences provides an opportunity to respond to questions and concerns while simultaneously providing an opportunity to seek valuable feedback, which allows the monitoring of the company’s perception by the financial community.’
Internal alignmentAT&T’s Amir Rozwadowski also highlights the importance of aligning the IR strategy with an internal audience. ‘You must gain support and operational alignment from the most important constituents: your employees,’ he says.
‘After all, at many companies – like AT&T – employees not only drive the business forward but are also shareholders themselves. Getting investors excited about your firm's financial and strategic future starts with educating and aligning your own teams.
‘Doing this well requires sharing the same kind of frequent and transparent updates that you deliver to investors. The truth is that your strategy will succeed over the long run only if it’s authentic and resonates both internally and externally.’
Keeping it simple is not always easy, but the strategy and its communication needs to be understandable by all stakeholders
For Barbara Noverini, director of investor relations for the Chicago-based fast-casual restaurant concept Portillo’s, acknowledging the distinction between an investment thesis and a narrative is important.
‘The investment thesis should be somewhat evergreen,’ she advises. ‘Use it to succinctly highlight the key drivers of value creation and what the unique factors of your company are that will sustain profitable growth over time. These factors often stay fairly constant, so use them as the anchor in your messaging.
‘By contrast, the narrative surrounding your investment thesis can change as you incorporate current events into your messaging. Use the narrative to address near-term benefits or challenges with the goal of guiding investors back toward the longer-term opportunity embedded in your investment thesis.’
