As information drives capital with increasing speed through global markets, it’s also remaking the investment landscape and, with it, the practice of IR. In representing the company to the marketplace and the marketplace to the company, the IRO works at that vital juncture of communications, finance, valuation, marketing and corporate governance, where words can move stock or trigger a lawsuit. ‘IR is changing so fast,’ notes Boston University assistant professor Cynthia Clark, ‘you really have to know how to have that dance with the Street – you’re being open, but you’re also being careful.’
Indeed IROs are more visible and more vulnerable than ever. As one beleaguered professional points out, ‘It’s exciting, but I also get shot at from all sides.’ With the game getting faster and the stakes higher, IR professionals at all stages are seeking out educational programs to supplement on-the-job training.
More and more universities and colleges are offering formal courses in IR (the majority of those in the US in partnership with Niri). Classes range from introductions to the profession for the novice, to focusing in-depth on a specific hot-button issue like disclosure. Still others are so high-powered that five to ten years IR experience is a prerequisite for admission. Course requirements can sometimes include a complex project and a final exam, but all provide some combination of readings, lectures, guest speakers, case studies, and class discussion, all the while emphasizing the practical, real-world nature of the learning experience.
‘There seemed to be a void in IR education,’ explains Patricia Harkins, director of executive education at the University of Connecticut. ‘When we developed the program, we were especially concerned about having the curriculum be applicable to people in their work, so that what they learned in class made them more effective in their jobs.’ There are two basic time-lines: programs are typically offered one evening a week stretching over several months, or in a five or six day period of total immersion. Fees can range from a few hundred dollars for a basic course, to nearly $6,000 for an advanced, intensive course; and several institutions offer certification in IR.
Strength in diversity
Students include both entry-level and veteran workers in the field, of course, but also CFOs, CEOs, MBAs, lawyers, public relations and corporate communications executives, marketing and salespeople, career changers, investors, as well as some who are simply intellectually curious. It is precisely this diversity which can enliven the sessions and allow for enriching cross-pollination. Though they can’t be all things to all people, courses can provide an intellectual framework for the field, a deeper understanding of IR challenges, networking opportunities, and solutions to specific, on-the-job problems.
Lisa Schnorr, IRO at Bausch & Lomb in Rochester, New York, who attended the University of Michigan program last summer, says, ‘It’s proven very useful. When I come across something out of the ordinary, I refer back to my course materials – you’d be surprised how often I’ve done that.’
Back to school
A relatively new addition to the range of formal course work options now available is likely to be close to home for many New York commuters. For two years, the University of Connecticut has been offering a certificate program sponsored by its division of executive education and management development: Investor Relations in the Modern World: Foundations and Applications. Aimed at IR professionals wishing to build skills, professionals from other areas such as law, finance and communications who wish to know more about IR issues, and also for those considering a career in IR, the course covers finance fundamentals, the investment process, capital markets, legal aspects of corporate governance, disclosure and the practice of investor relations. The sessions involve intensive group work, culminating in the final presentation of student-developed IR plans for critique by faculty and IR professionals.
‘The student groups are assigned a local firm at the beginning of the course, and, by the end, they come up with a Powerpoint presentation addressing the company’s IR program issues, strengths and weaknesses,’ explains Walter Dolde, associate professor of finance at the University of Connecticut School of Business, who teaches the class. ‘They’re so impressive, you could actually take them as they are and charge a lot of money for them.’
Students who have participated find the course meets their needs. Jonathan Foltz, acting CFO at Delcath Systems, a Stamford, Connecticut-based medical start-up, who expects to take his company public in the near future, says, ‘IR is becoming so much a part of the CFO function, and I have a much better understanding of the other side of the table now.’ He also found the contributions of guest speakers, like Texaco IR VP Elizabeth Smith and Jagcom Group president Julianne Grace, especially valuable in presenting IR practice.
Similarly, Andrew Goodale, VP and assistant national sales manager at MBIA Municipal Investors Service Corporation, found the class stimulating and practical. ‘What stands out is they’re using a nice blend of academic work and then practitioners discussing what they did on the job last week.’ The weekly format is also an advantage for Goodale: ‘I’ve taken five-day executive education courses, but you get too much information. My preference is to take the material home, think about it and let it sink in.’
University of Connecticut
IR in the Modern World
Ten weekly 3-hour sessions
Spring or fall semesters
$2,195, $1,895 for Niri members
Information: +1 860 486 5985
A degree above
A more extensive certificate program is offered by the University of California at Irvine, where successful candidates must complete a total of seven six-week evening courses for a minimum of 180 hours of instruction. The courses, open also to those not pursuing the certificate, are aimed at both entry-level and experienced corporate personnel, but require a basic understanding of financial accounting.
Introduction to Investor Relations is taught by David Erickson, director of IR at PacifiCare Health Systems in Santa Ana, California and a Niri national board member with a particular interest in professional education. ‘It’s important to be able to offer this kind of knowledge to a broad audience through various means, so we’re looking at distance learning options, like satellite and internet hookups,’ he says. ‘Investor relations is an important role in a company, with many potential pitfalls if it’s not practiced correctly, and we need to put some measures out there so people can judge how effectively they are performing their role.’
Following the introductory overview, students can take The Capital Markets, The Investment Process, The Corporate Environment, Communications for the Investor Relations Professional, The Practice of Investor Relations, Creating the Annual Report, and Communicating During Times of Crisis, though not all courses are given every quarter. Education is especially important for those IR professionals who have found themselves thrust into their roles, according to Erickson: ‘They have to make split-second decisions all the time, and in many areas, especially disclosure, there are few black lines, so they find themselves discriminating among shades of gray.’
University of California at Irvine
Certificate program – range of courses
Evening classes over six weeks
Tuition introductory course: $235
Information: +1 949 824 4661
Increasing complexity
Demand for in-depth study of disclosure prompted New York University’s school of continuing and professional studies and Niri’s New York chapter to offer for the first time a unique course entirely devoted to complex issues. Investor Relations: Issues in Corporate Disclosure is a winter semester course taught by consultant Morgan Molthrop, director at GA Kraut Company, consisting of lectures, simulations and class discussions led by guest professionals, including Niri’s Lou Thompson and Viacom’s Martin Shea. Nightmares on Wall Street: worst analyst meeting stories is the focus of one session.
‘For management to lose credibility is the worst thing – it can affect the company’s reputation for decades,’ avers Molthrop. ‘Even so, one of the most common situations I’ve come across is that, when the company is in crisis, management wants to hide bad information. By having a good understanding of what might happen, the skillful IRO can work against human nature to maintain credibility.’
Attending the class last semester were lawyers, corporate and agency IR professionals, marketing execs and PR people. ‘Even though I’ve been doing IR for 13 years, I still learned a lot from Morgan’s course,’ says Ilene Angarola, IRO at Queens County Bancorp, and a member of Niri’s sub-committee on education. ‘Corporate disclosure is evolving and it gave us an opportunity to discuss issues like the SEC’s aircraft carrier proposal that could change the way we have to do business.’
At the other end of the spectrum is Kristian Valvitie, who has been an IRO only since the beginning of this year. Formerly a business analyst for Fidelity, Valvitie is now head of US investor relations for the Dialog Corporation, a UK-based provider of online information and internet technology solutions. ‘Even though disclosure was the focus, the class, which was fantastic, gave me a greater understanding of the investor relations process as a whole, and provided a great framework for all the relevant issues.’ Shelley Young, an account executive in the New York office of The Financial Relations Board, a Chicago-based investor relations firm, also found what she was looking for. ‘My firm has as clients many small-cap companies looking for guidance, and the course offered an excellent forum to discuss these issues.’
To attend the course, a student needs to be working in the field, or to have taken NYU’s introductory course, taught by June Filingeri of Comm Partners and Ed Nebb of BSMG Worldwide.
New York University
Investor Relations: Issues in Corporate Disclosure
Ten weekly evening classes
Tuition: $550
Information: +1 212 790 3212
Covering all the basics
Boston University has been offering a course in IR at the College of Communication for 15 years, and, while it is predominately taken by seniors and graduate students on their way to an MBA, the semester-long sessions are open for auditing by non-degree students as well. ‘The IR person can’t just be a good communicator,’ says assistant professor Cynthia Clark. ‘The field has evolved from a general approach to needing very specific skills going in the door.’
So, in her classes, she covers all the basics, from the history of IR to financial statements, economic indicators, debtholder relations, fundamentals of accounting and disclosure.
MBA student Carolyn Dale took Clark’s course and found it illuminating: ‘I was familiar with a lot of the material from my financial courses, but I got a new perspective from the communications side.’ But for Kristin Hoppe, an MA student in communications, the course was a revelation: ‘I’m almost done with my program, and I didn’t even know the profession existed,’ she marvels. ‘It’s the most unique class I’ve ever had, combining the best aspects of business and communication.’
As a member of Niri’s sub-committee on education, Ilene Angarola deplores IR’s low profile and is working to change it. ‘It’s a great career, and I’d like to see it become visible on an undergraduate level,’ she says. ‘I feel people shouldn’t have to hear about it by chance or stumble upon it through a quirk of fate.’
At Northwestern University, Nancy Hobor has been teaching IR for nearly ten years, bringing her experience as communications and IR VP at Morton International, a $2.5 bn salt and chemicals company, to her role as adjunct professor of integrated marketing communications at Medill School. Though she covers the dynamics of the equity markets, stakeholders within these markets, the flow of investor information and how to have an impact, as well as SEC regulations and corporate governance issues, Hobor looks for ‘interesting ways to make it real,’ for example, having her students ‘invest’ $50,000 and track their portfolios for the duration of the course. Before the tenth and final session, each student must also develop an IR plan for a specified company with goals, strategies and tactics, while keeping within a tight budget. The best ones make competing presentations to a group of Chicago Niri professionals. Of those, the three judged best receive scholarships – $5,000 for the winner – and get to add an excellent credit to their resumes.
An advanced class worked with Dan Rabinowitz, the CFO of online grocery vendor Peapod.com, to develop an IR plan for the company, including a factbook, a crisis plan, and a web site. ‘It was valuable for everybody, and the students loved it,’ recalls Hobor. Says Rabinowitz, ‘The situation analysis was a real eye-opener, and their approach was able to put an awful lot of discipline and process around our IR plan. Ultimately, it gave me the confidence to go ahead and put in a web site.’
One-week MBA
‘We give them a one-week MBA,’ says Russell Lundholm, professor of accounting at University of Michigan’s business school who, together with guest practitioners, teaches an intensive summer course for about 30 students, mostly experienced IR professionals.
The sessions zero in on finance and investment fundamentals, capital markets, corporate governance, disclosure and the design, implementation and evaluation of an IR program. Students thrive in the intensive atmosphere, according to Lundholm. ‘Participants are excited to get away from the daily ringing of the phone and think about the big picture for a change,’ he notes. ‘Plus IR people are outgoing, fun people. If you put 30 of them in a room together, a party breaks out.’ Tom Price, corporate development VP at Chesapeake Energy in Oklahoma City, agrees: ‘Most interesting was the fact that it was not an overly structured process, so there was dialogue between the students and the professors.’
University of Michigan
The Theory and Practice of Investor Relations
August 8-13, 1999
program fee, including living accommodations: $4,650
Information: +1 734 763 1000
Beyond the US
Formal courses aren’t confined to the US. Strategic Management of Investor Relations has been offered for three summers at the University of Western Ontario’s Richard Ivey School of Business. ‘Some have financial backgrounds, some come from the public relations side,’ explains Ivey associate professor Darroch Robertson, who is co-director of the course. ‘What we are trying to give them is a real understanding of the strategic issues.’
Originally developed by Andrew Karolyi, who still teaches the finance sections, the program presents case studies of actual business situations, as well as simulation and role-play, through which participants become investors, analysts, brokers, traders, market makers and arbitrageurs. Having been given decision-making powers, students are constantly challenged to defend their choices, and they receive training in dealing with the media spotlight, including camera presence and body language. ‘The course content was very relevant,’ says Peter McBride, communications and IR VP at Imasco Ltd in Montreal. ‘All of the faculty were first class, but when you’re cloistered up for five or six days with a bunch of people, you also learn a lot from one another.’
Richard Ivey School of Business
Strategic Management of Investor Relations
August 8-13, 1999
Program fee including accommodations: C$5,750, C$5,000 for Ciri members
Information: +1 519 661 3272
Old & new
At London’s City University, Carla Millar runs the UK’s first academic course on IR. ‘Eight fellows of the Investor Relations Society join 24 MBA students in work, dialogue and joint projects during and after the course, which doubles as the IRS’s advanced course,’ explains Millar, who designed the program to combine theoretical and academic approaches underpinned by City University staff with guest presentations by analysts, fund managers, IROs, CEOs and market researchers. Topics include managing expectations, stakeholders and communication flow, the IRO’s strategic role, valuation tools and techniques, and developing an international perspective on corporate finance.
According to Jill Sargeant, executive director of the IRS, the course attracts people at the top of their careers: ‘The field is changing. A lot of IROs have come from a PR or corporate background, but now they’re coming face-to-face with hard-nosed analysts and fund managers.’
Neil Ryder of London’s Sage Partners, a board member of the International Investor Relations Federation, agrees that the practice of IR is evolving, and that formal courses might be offered in other countries in the near future. ‘Dirk in Germany is in discussions with universities , and there’s also activity in one or two other places,’ he says. ‘But, as far as I know, the UK is still the only European country to have a program.’
City University
Investor Relations Advanced Course & MBA
5 days over a 6-week period
Tuition: £1,400, £1,200 for IRS members
Information: +44 171 379 1763
Putting it into play
As IR evolves and grows in importance, its principles and best practice will no doubt increasingly be made available in formal course work targeted toward professionals at every level of the field, whether on a university campus, via satellite or the internet.
Stanford University is developing its first IR course, Investor Relations In a Strategic Environment, for presentation in early October, especially for IROs with 5-10 years of experience. ‘You can’t think of a more exciting place to be than in the IRO role,’ says William Barnett, associate professor of strategic management and organizational behavior at Stanford’s graduate school of business, who is directing the program. ‘IROs need to understand and manage the many demands that come at them, and our program has some marketing, some non-market or political issues, finance and valuation, obviously, classic use of competitive strategy, organizational behavior, legal issues; every aspect of business comes into play.’
Stanford University
Investor Relations in a Strategic Environment
6-day intensive course
Program fee: $5,800
information: +1 650 723 2146
To find out about educational opportunities in the US, contact Beth Carty at Niri on: +1 703 506-3573 or [email protected]. To tell us about any programs we have missed out, contact [email protected].
