The role of an investor relations officer (IRO) has changed significantly as the way investors interact with issuers has evolved. We have developed this investor relations best practice guide in order to help IROs with their shifting responsibilities in this important position. Given the recent volatility in the markets and the rise of shareholder activism, the Harvard Business Review casts a light on the importance of IROs in this uncertain landscape, stating:
IROs are essential for financing an organization and for creating value, given their unique role in bridging the gaps between issuer and shareholder. This article explores how to use this position as effectively as possible to ensure that the connections with your investors remain strong and fruitful.
What makes a leading IR team?
Investor relations best practices
Create an IR strategy
Communicating effectively with investors should be more than several events annually. To increase touchpoints, you need an IR strategy, but many organizations do not systematically link their strategy and investor relations efforts. This approach risks inconsistent messaging to shareholders and blind spots where some investors who could enjoy a fruitful relationship with the issuer are ignored and do not therefore invest. A sporadic approach to communication can also be detrimental to the investors’ trust in the business and decrease the power of the equity story.
An ideal IR strategy should contain:
A simple, clear and compelling story introducing the business and its place in the industry
Identification of key stakeholders, including analysts, current shareholders, potential investors, journalists and even the issuer’s employees, who may sometimes represent a large portion of the shareholding
Messages aligned with the various stakeholder groups and their level of expertise
- A simple, clear and compelling story
A professional IR website or IR section on the main website, providing information about the company, its products and services, its financials, profiles of the board, an events calendar, latest news and any other resources that would be helpful to investors
Develop an annual timetable
By creating an annual timetable, an IR team can schedule their meetings and roadshows more effectively. There are many events that must be added to the calendar straight away, including the AGM and earnings calls. This allows you to arrange the other essential IR events across the year, plan the logistics involved and being able to work on promoting them in good time to ensure attendance.
By working out the schedule in advance, you can maximize the opportunities to meet new and existing shareholders and plot meetings, investor days, capital markets days and roadshows in a manner that ensures you provide all of your key stakeholders with adequate time to show how much you value their input.
Move to hybrid events
Hybrid events allow you to increase the reach of your investor relations activities. They involve hosting the event in a physical location with some of the audience members attending in person, as well as broadcasting the event online so that remote attendees can be involved, too.
This allows you to talk to a larger audience, reducing the need to take your executives on the road in order to engage investors. You can present the information to all stakeholders at once, wherever they are based. It is also more convenient for investors who cannot clear a large enough window to travel to a physical location and attend the event.
Hybrid events save money for an organization, reducing venue costs, refreshment expenses, travel and accommodation fees and even printing costs, as there are likely to be fewer physical attendees. They are also more environmentally friendly, using less paper and with fewer people travelling to the venue.
Company Webcast, part of Euronext Group, is a leader in producing professional webcasts and webinars for organizations, helping them host hybrid investor relations events. The platform integrates a number of interactive features, allowing attendees to fully engage with the meeting wherever they are based.
Cost-effective to set up Convenience of all information in one place Supports remote work
Holding all company information in one place is a security threat Needs someone dedicated to keeping it updated Easy to ignore by employees Risk of information overload
Emails & company newsletters
Free to use Accessible from anywhere Alerts all users on arrival of new information in inbox
Mailboxes can be packed with too much information Easy to ignore Multiple messages in one day can disrupt work
Project management tools
Easy to track project progress Encourages collaboration Easy for employees to see the bigger picture
Can feel like you are being micromanaged with constant updates on progress Difficult to stay on top of giving the right permissions to the correct people to avoid unauthorised co-workers seeing sensitive information Can be costly to set up for larger businesses