There is a song I remember from somewhere that begins: Who do you turn to when nobody needs you? A valid question in many instances, I am sure. I find, however, that the more relevant question for my professional dealings with investors is: Who do you turn to when everybody needs you? I am lucky to have an answer, a necessity in the healthcare industry, known for its profusion of healthcare conferences.
Our company treasurer, Jack Wyszomierski, has come to be the person on whom I rely most frequently, to present either with me or on his own when schedules require it. Together, we make an interesting pair. He is tall, whereas I, suffice it to say and dispensing with politically correct euphemisms for the vertically challenged, am not. His background is financial, whereas mine is marketing. He attended a male-dominated university and I attended a women’s college. As treasurer, he does not have to do IR, whereas for me it is my raison d’tre in this company. Finally, in terms of style we are very different – which should be obvious from our backgrounds.
Despite our differences, or perhaps because of them, we work very efficiently together. We have come to know, almost intuitively, who will say what, when. I attribute this affinity to the fact that we both come from Pittsburgh, Pennsylvania, a renovated rust-belt city that, as everyone knows, produces only the finest professionals in every field. In fact, I have it from an inside source that the rating agencies use the proportion of a company’s employees who hail from Pittsburgh as one of the key indicators for their evaluations.
These reflections, together with the tune I can’t seem to get out of my head, led me to wondering if there were other investor relations professionals out there managing to do all their presentations on their own; and, if not, to whom do they turn for help? As we all know, the question is not just about who can read a speech that has been properly sanitised by those who understand the nuances of our discipline. It is, rather, about who can field sometimes difficult questions and know when to be open and when to seek refuge in discretion.
Talking to some IR colleagues around the world, I found other examples of the close type of partnership I share. Jari Jaakkola, with Metsa-Serla Corporation in Finland, teams up with the company’s CFO, Hannu Anttila, in giving many presentations to outsiders. Jari echoed my appreciation of the ease of working closely in this manner, which obviates the need to spend time rehearsing. He also said, however, that in his company there is a strong commitment to the notion that all members of senior management should be investor relations officers, a philosophy which I think is very important and which we also practice here at Schering-Plough.
Gary Lloyd, of TransCanada Pipelines adopts a similar approach. In his company, senior executives do the outside presentations. They are often handled by the CFO or the CEO but Gary likes to get as many people involved as possible. He says the aim is to show ‘bench strength’. That phrase sounds vaguely sporty, maybe related to hockey or basketball where the strength of the team comes not only from the starters but also from those who back them up.
Someone who carries this philosophy through even further is Peggy Moore of PepsiCo. In her company, grooming of executives for IR begins at a low level through exposure to analysts and investors at lunches and less formal meetings. She does not, of course, turn new-to-IR managers loose on savvy analysts and investors eager to lay information traps for the unsuspecting neophyte. Rather, she establishes a dialogue with managers so that they know what can be said and know to refer to her anything with which they are not comfortable. An interesting benefit from this system is that these managers sometimes learn interesting competitive information from the erstwhile information hunters who get caught in their own traps.
Amelia Soares works for Sasol in South Africa, a country that is now firmly in the process of integration into the international capital markets community. As her company is a new arrival on this scene, Amelia runs what she calls missionary meetings every year, usually in March. No hymns are sung at these sessions, nor does a preacher pray for the saving of the congregation’s souls. Instead, the virtues of the company are expounded to target groups who are not yet shareholders. Then, in October, Soares stages another presentation, to explain results to existing shareholders. At all these meetings, she is accompanied by two or more senior executives.
As an aside, in talking to Soares I learned that Sasol has a practice of which I am envious. Following its year-end in June the company publishes results in September in its annual report. In the interim period, like many companies in the UK, Sasol enforces an information black-out in dealing with the investor community, so that there is no chance of anything being leaked inappropriately. Just imagine: no analysts for the whole of the summer (of course, it’s the middle of winter then in South Africa, but it bears little relation to January and February in New York).
Among other newcomers to investor relations is Ina, the Italian insurance company which is part of the government’s step-by-step privatisation programme.
Ina’s IR manager Stefano Marini is no investor relations novice, however: he was with Montedison for many years, the Italian utility company that at its height had IR offices in several major countries and a sizeable staff to support them. The programme Stefano is developing at Ina undoubtedly benefits from his experience but, as we talked about how things usually happen, he admitted that the company is still trying to establish what is usual. Since it is such a new discipline for the company, it does not yet have any habits, either good or bad.
As I spoke to these various IR professionals, I realised the extent to which differences exist, on subtle and not-so-subtle levels. Klaus Jessen of BASF, for example, likes to bring out his senior management – including the CEO when possible – because that’s who the investment community really wants to see.
On the other hand, Lisbeth Lindberg of Orkla AS in Norway, likes to keep her chief executive officer away from most events (just as I do) so that she can enhance his impact by bringing him out like a special gift to the market on rare occasions.
What this all tells me is that different ways work. Some people confront the investment community in numbers; some do it alone; and some rely heavily on a select few. What rises above it all is the strong commitment that I hear from everyone to convey good information to those who need it.
