Successful investor relations requires C-suite support – particularly in a post-pandemic world, argues Marina Calero
I’ve been hosting IRO Coffee Breaks calls – where senior IR professionals come together each week to try to interpret the present and look into the future – for more than a year.
They share many views but all fall under one theme: that this is an era of more. More demands on our time, more stakeholders to address, more disclosure to provide, more use of technology, more focus on a company’s values, purpose and its role in society, more on diversity, more on the justification of remuneration.
I was recently asked what successful investor relations is. After more than two decades in the industry, I always have a range of answers ready to be deployed, but this time I had to stop and give it some thought. Are the usual points I make still valid? Have they stood the test of post-Covid-19 reality or have we seen an accelerated evolution for this industry?
Over the last 20 years I have watched IR grow up as a profession, from a quasi-admin role – an afterthought – to the IR of today: a role worthy of a place at the top table. Admittedly, the latter is still rare, but it is certainly the direction of travel.
Demands on IR teams have also increased, but what remains constant is the need for continuing insightful dialogue between investors, analysts and a company based on consistency and transparency, which builds one of those things money can’t buy: trust.
With ever-increasing pressure on management, IR teams are best placed to share the burden and get the message out to the market. They have a finger on the market’s pulse but are also expected to have an in-depth knowledge of the company’s business. In reality, though, many IR professionals are still seen internally as messengers: telling the story to the investment community secondhand while executing the financial calendar.
A game changer is when IR is part of the team crafting the message, bringing those valuable insights to the table, shaping the strategy, asking sometimes uncomfortable questions, keeping an eye on value creation for wider stakeholders and becoming an adviser to – if not a member of – the board.
An IRO with such level of access, deep understanding of the story and rationale for strategy and targets is a voice of authority and an invaluable asset to the market.
Looking at those IROs who command such respect internally and externally, I see a few similarities worth mentioning, from a C-suite that sees IR as a strategic function rather than an execution to an excellent working relationship with various internal teams. They often spend more time developing an understanding of operations that is as detailed as possible. Importantly, they also have a regular dialogue with the board on remuneration, nominations, audit and other broader issues.
Success in IR likely means different things to different people and is shaped by their experiences and expectations. For me, being a crafter rather than a messenger and having that support from the board, senior executives and the wider team remain the keys to success in investor relations.
Covid-19 hasn’t changed that, but the speed of events and the changes we’ve seen over the last year or more have crystallized the importance of IR for many boards and management teams, hopefully accelerating a wider change of attitudes toward investor relations.
All of this makes a stronger case for IR evolving into a more strategic role within any listed organization – which is exactly what is needed in this post-pandemic time of ‘more’.
Marina Calero is a host of IRO Coffee Breaks and former IR director at London and Dublin-headquartered Powerscourt and McCarthy and Stone
