What and when to consider when prioritizing resources
Budgeting for activity within an IR strategy can be a tricky business, with many teams facing a ‘chicken and egg’ scenario – what comes first, the plan? Or the budget that allows its realistic delivery? This can be a delicate balance, especially considering the financial constraints in today’s business landscape.
‘We need to have tight budgets, as all others do,’ says Richard Williams of Unilever. ‘We agree the budget after we have outlined our plan. Our IR budget is mainly people costs, so any significant cost reduction would involve cutting people, and it is not a big team.’
The key challenge is to determine how best to measure ROI on our activity, which is always tricky
Describing his approach to setting his resources and schedule, General Mills' Jeff Siemon says: ‘Our budget framework has stayed fairly consistent over time, with key budget areas including investor outreach, events and the ‘blocking and tackling’ of investor relations, such as contact management, stock surveillance and the IR website.
‘We try to be scheduled out roughly six months in advance and then have a framework for key activities that are between seven and 12 months out, even if we haven’t committed to speakers, sell-side partners, and so on.
‘We prioritize events based on investor reach and quality of investor connections, geographic breadth, time of year (how it fits into our messaging schedule) and – of course – a desire to engage with all of our sell-side partners on a regular basis.’
Our IR budget is mainly people costs, so any significant cost reduction would involve cutting people, and it is not a big team
When allocating budget, it’s important not to overlook associated costs, notes Jill Sawyer of Prologis. ‘Our executive team values the work our IR team does, which includes a lot of face time in the post-Covid and post-Zoom world,’ she explains.
‘We are allotted the resources we need, within reason, and we do weigh opportunity costs (inclusive of our time and that of and our executives) when planning travel.’
General Mills has boosted its IR budget in recent times for more targeted activity, Siemon adds.
‘Recently, two areas that have required differential investment have been increased video production and greater ESG messaging and events,’ he says. ‘The key challenge is to determine how best to measure ROI on our activity, which is always tricky to do concretely in the IR world.’
