Deeply understand your network, company and equity story
A well-defined strategy is clearly just the starting point for the IRO, setting the blueprint for a compelling communication narrative with investors to raise the company’s profile and attract and retain shareholders. After the plan is in place, the hard work arguably begins: translating strategy into action. With this in mind, what closing top tips do our expert IROs have to share for successful strategy and implementation?
‘Strategy is really all about making thoughtful choices about what to do and, importantly, what not to do with your limited resources,’ says Jeff Siemon of General Mills.
‘As IROs usually have much more they could do than they have resources to accomplish, the key is to be able to ruthlessly prioritize those things that will have the greatest impact on the company’s long-term value.
Strategy is really all about making thoughtful choices about what to do and, importantly, what not to do with your limited resources
‘Additionally, make sure to think about all of your constituents and how you can impact and influence each of them – for instance, IR’s ability to impact and influence our board, senior management and broader employee base is often underappreciated, I feel.
‘Finally, remember that this is a constantly evolving function, and there are wonderful opportunities to learn best practices from our peers through formal and informal ways. I find that keeping a mindset of curiosity, constant learning and continuous improvement is a great way to approach this job and keep yourself and your team sharp.’
Build the capabilities you require through people, processes and tools
The driving force for the success of any IR strategy is good IR itself, says Trey Campbell of Luminar. ‘Know the company inside out – no IRO will be taken seriously without comprehensive business acumen,’ he advises.
‘Have and grow trusted and candid relationships with current and potential shareholders and research analysts. Don’t just be a cheerleader: be honest about successes and miscues. Get outside-in perceptions and expectations of the firm from those relationships so you can bring them back to management and address them.
‘Build trusted relationships and networks inside the company and influence business direction as appropriate. Don’t be a spectator – contribute to influencing better outcomes and speak truth to power on tough topics. Finally, build confidence in the leadership team and in the strategic plan that will deliver long-term shareholder value.’
And don’t forget your people, recommends Jill Sawyer of Prologis. ‘Build the capabilities you require through people, processes and tools,’ she says. ‘Streamline your efforts by clearly conveying the company’s strategy and goals and relaying investors’ feedback to management.
‘Tailor your equity story to investors that can be persuaded to appreciate and respond to it. Finally, create opportunities for continuous learning and iteration in support of ongoing value creation.’
Know the company inside out – no IRO will be taken seriously without comprehensive business acumen
Sometimes, thinking about IR from a different perspective can be a useful tool when taking a step back to look at how the function works within the wider operational landscape, says Siemon.
Prologis’ Jill Sawyer’s measurement tips
Generating a full multiple on the company’s stock price.
Attracting well-aligned long-term capital.
Ensuring the market understands the company’s strategy and plans to execute it.
Providing the sell side with as much information as needed to provide an accurate and reasonable view on the company.
Tying engagement to ownership or to investor behavior and, ultimately, back to the relative multiple.
Taking feedback from the investment community, learning from it and letting it inform further outreach. This allows two-way communication that helps investors feel plugged in and informed.
Gaining feedback from the board to incorporate into materials and processes whenever possible.
‘As a food company, we are at our best when we deeply understand our consumers and bring them products that deliver on their needs and help solve their problems,’ he explains.
‘I think IR operates in the same way: we are at our best when we deeply understand our ‘consumers’ – primarily institutional investors, but also retail shareholders, financial media, our employees and many other stakeholders – and deliver communication, both the ‘what’ and the ‘how’, that meets their needs. That is at the core of our IR strateg: if we’re relentlessly focused on our ‘consumers’ and what they need, our IR efforts will be successful. If we lose that focus, we will not be at our best.’
General Mills’ Jeff Siemon shares examples of IR strategy accomplishments
‘From a content standpoint, we’ve really stepped up the way we incorporate ESG into our regular investor communications and outreach. Similarly, we’ve leaned into our portfolio, reshaping the story across our key investor touch points. In each case, we are now getting much more credit from investors for the work we’re doing, and I believe that is leading to better investor perception of General Mills and, ultimately, a more attractive valuation for our company, though it’s difficult to measure that directly, of course.
‘We made some meaningful changes to the process of how we issue our quarterly earnings that better addresses the issue of our investors’ need for earlier visibility of our results and prepared remarks and more time to digest them before we kick off our Q&A webcast.
‘Through intentional outreach and engagement, both in person and virtual, we’ve seen some small but steady increases in our international shareholder base. And we’ve greatly increased the external orientation and understanding of investor perspectives within our management and broader employee base.’
