Developing Effective Investor Relations

Mark Knight is a Director at Four Broadgate the London PR agency, specialists in financial services public relations amongst many other services.

Investor Relations (IR) is vital business tool that can help any business generate access to the equity capital that will sustain its growth, but IR it is a complex field that is difficult to define. Like Public Relations (PR), it is constantly evolving but, unlike PR, it also gives practitioners strict compliance issues too. So how can a robust investor relations programme be developed and maintained?

Embracing the Technical Edge
Since at least the late 1980s, companies have been hiring trained investment analysts to communicate their corporate stories to potential and existing stakeholders. This has led to IR specialists being required to have a varied range of skills He or she must be a blend of proficient analyst, expert accountant and public relations specialist, in order to have sufficient expertise and ability to encourage and give investors the confidence to retain or increase their holdings.   

 

A Blend of Skills
Institutional investors increasingly want to hear about the “bigger picture” in terms of the information that they are provided with by any company they are talking to (Big Data). As a result it is common for a straightforward financial report to be followed up by pro-active call-backs from sales representatives. This approach is intended to elucidate the information previously provided while simultaneously addressing any questions that may remain unanswered.

A Financial Focus
Modern Investor Relations is about addressing the complex needs of the investment community, by providing a greater level of financial insight into a company’s performance than would normally be offered through public relations activities. In other words, an increasing number of stakeholders are now seeking to understand the proverbial “bottom line” with as much clarity as possible. It therefore stands to reason that an investor relations specialist should spend a greater amount of time liaising directly with the CFO of a company, as opposed to a communications officer.

Co-ordination with Public Relations activities
Effective investor relations represents a combination of financial insights alongside more traditional public relations techniques. Both of these disciplines are distinct and yet each is ultimately intended to build the brand recognition (and value) of a firm. Thus, inter-departmental correspondence is essential, to ensure that the needs of investors are addressed within an acceptable time frame. Effective investor relations is a key component within the communications activities of any business, and its importance cannot be overstated. It is increasingly scientific in its targeting of investors and it is vital to appreciate the ways in which newer methodologies can be applied to reach potential investors.