Unlike becoming an astronaut or racing driver, a job in investor relations is not a livelihood that many kids dream about through their school days. But as we grow older and stop dreaming of walking on Mars or winning the Indy 500, it seems that IR increasingly becomes an appetizing career option for people working in a host of different professions. Few other disciplines can claim to attract to its ranks professionals from such a diverse set of backgrounds.
The disparate career histories of many IR practitioners is highlighted in the latest membership survey from the UK’s Investor Relations Society (IRS). Before taking their current position in IR, the 180 survey respondents had worked in 23 different fields, including banking, marketing and journalism. Some may opine that this broad range of professions is linked to investor relations’ still youthful stage of development. Others insist IR requires a wide skill set that does not lend itself to recruiting staff from a narrow band of jobs. Indeed, it could be said that if you get thirty IROs into a room and utilize their collective work experiences, you could solve all your legal, financial and insurance headaches in one fell swoop.
The broad professional background for IR is not a new phenomenon, claims Jill Sargeant, executive director of the IRS. ‘This has always been the case,’ she says. While accountancy and corporate affairs made up the most common survey responses, Sargeant maintains, ‘No best practice route exists for people seeking to enter the investor relations profession.’
This sentiment is echoed by David Mounde, IR recruitment consultant at London headhunters Vicky Mann & Associates. While he agrees that IROs tend to come into the job from a very diverse set of backgrounds, he highlights two main career paths. First, there are those who enter investor relations having served as a communications manager or perhaps the CEO’s personal assistant. ‘These people gain good corporate communications experience and are typically given the IR mantle as their company grows and learns to handle investors,’ Mounde says. The main drawback, however, is that communications professionals tend to have a more limited financial knowledge. ‘Their credibility with analysts and investors in the financial markets is therefore somewhat limited,’ he claims.
The second main route Mounde highlights is moving into IR after several years on Wall Street or in London’s City with a major financial institution. Typical previous occupations in this category include analysts, brokers and portfolio managers.
Making the jump
According to Mounde, more and more people are seeking to make the jump from investment to investor relations. So what is it that attracts top talent to IR?
For Chandler Spears, director of investor relations at Charles E Smith, the Virginia-based real estate company, his move followed years of encountering IROs in his previous jobs. ‘Having dealt with many people in investor relations, I wanted to know how I could get to be on the other side of the meetings and conference calls. I already had a strong relationship with people in the industry, so I felt that I had a good idea of what is important to investors,’ he says. Before joining Charles E Smith last year, Spears produced financial information on Reits for a research and publishing firm, and also spent time managing a hedge fund. ‘Besides, I found that the hedge fund work was making me old before my time,’ he smiles.
Another who sought a career change is Leslie Landefeld, director of IR and PR at PolyMet Mining Corporation, a small-cap firm based in Denver, Colorado. Some novice IROs may think that their new position requires comparatively a lot of travel. Not Leslie Landefeld. She explains that her current job involves a lot less travel than her previous post with the company. ‘I was an economic geologist, which meant that I spent a lot of time traveling to sites in Central and South America. Working in investor relations now means that although I still travel, it tends to be shorter, domestic trips.’
Following her appointment last year, Landefeld must surely be one of the few geologists currently working in IR. But it wasn’t the cut in travel time that lay behind her dramatic career shift: ‘I believe there are more opportunities in investor relations than there are in being a geologist. Mining is in recession worldwide, as commodity prices are so low at present, so my prospects are far better working in IR than working out in the field,’ she adds.
Her excellent technical knowledge of the mining industry finds Landefeld well suited to the job of explaining her company’s strategy and operations to investors and analysts. ‘I possessed a good technical knowledge and good communication skills, but I still found it challenging moving from the technical world into a very public role,’ she says. ‘You need to realize that people don’t always understand the technical terms and details of the mining industry. Working in investor relations, you have to serve different audiences of analysts, institutional investors and individual shareholders. Each group has varying levels of understanding; institutional investors tend to be a little better informed, but you have to learn to cater to all levels,’ she explains.
Both Landefeld and Spears brought to IR excellent prior expertise in their respective industries. Indeed, new or aspiring IROs need to possess a knowledge of their sector in order to have credibility with analysts and investors, says David Mounde. ‘After all, there’s no point in someone with a career background in telecoms research going to work in IR for a tobacco company,’ he adds. He highlights how specific skills can lead to IR work in certain companies. For instance, people used to dealing with political risk are well suited to working for a large oil company that may have to deal with the concerns of investors over the actions of foreign governments and non-governmental organizations. ‘Alternatively, those with a legal background may be in favor with the tobacco companies. It comes down to people with backgrounds that are well-suited to certain sectors,’ he adds.
Outside looking in
Getting more involved with corporate life was the drive behind Sue Sissons’ decision to trade in her job as a securities analyst for the position of manager, investor relations, at Taylor Woodrow, the UK construction group. ‘I’d spent a lot of time with companies, but always on the outside looking in. I wanted to get more involved and gain more hands-on experience,’ she says. According to Sissons, her analyst background has proved extremely useful in her new career: ‘Being a former analyst myself, I understand them better and I’m able to empathize well,’ she says. ‘Analysts are a breed apart. They tend to scare management with difficult questions and have many quirks, which can be unsettling.’ Clearly her previous career means she’s well placed to deal with the demands of analysts and build solid working relationships with them.
While many of the skills Sissons employed as an analyst have transferred over well to IR, there are major differences between the two. ‘When things aren’t going so well, you have to stick by the company and work through it. You can’t just move onto other investments. But I like the fact that my role is very varied; I’m doing many different things in the course of my daily work,’ she adds.
Another former analyst who has recently switched to the world of IR is Raymond Kindiak, director of investor relations for MGI Software, the Toronto-based digital media company. Kindiak brought a wealth of experience to his new post, having handled corporate finance and research activities in previous positions. He is also a member of the bar in the province of Ontario. ‘My job reflects my skill set,’ he remarks. ‘In small companies, the investor relations officer can wear several hats at once. The role is developing into a multi-faceted occupation.’
For Kindiak, an important skill for new IROs is an ability to easily absorb information from the market. ‘Investor relations is a two-way communications process. There are flows of information from companies to investors, but also, importantly, from investors to companies. In order to be able to speak to the market, you must be able to absorb the information released by the market about your company,’ he comments.
Chandler Spears agrees that the ability to speak to the market with authority and credibility is something any budding IRO must display. To do this effectively, relationship management is critical, he argues: ‘You need to show how you will manage the expectations of the investment community.’ He acknowledges that despite his strong background in real estate research, there are some aspects of his job that are brand new. ‘There wasn’t much of a learning curve, but there was one area that I had to do a little work on and that was the ‘selling’ of our company to investors, telling them why we were such a good investment. It’s really marketing-type work,’ he adds.
Brushing up
Unsurprisingly, the shift from geology to IR did require a degree of brushing up on IR skills for Leslie Landefeld. She advises some training in PR or marketing – related disciplines she believes will be useful to any would-be IRO. She also recommends keeping a legal eye open on rules and regulations. ‘Ensure that you learn the international rules on disclosure and securities legislation. In this respect, Niri has proved to be a very useful resource. They have some very good materials for people joining the profession and I’ve attended some extremely useful seminars on IR practice,’ she adds.
Enrolling in educational programs of IR associations is also recommended by Vicky Mann & Associates’ David Mounde. ‘For people based in the UK, contact the IRS. They have a good web site and have established some useful training programs, giving some very good advice,’ he adds. But educational resources for potential IROs remain thin on the ground. Britain’s only university-based IR education program, an elective on an MBA at London’s City University Business School, has recently stopped running, according to Jill Sargeant of the IRS. ‘We used to send our senior people on the course to improve their investor relations knowledge,’ she explains.
Dr Carla Millar from the City University Business School explains that the investor relations advanced course was established in conjunction with the IRS and aimed at IR professionals who are working towards a fellowship in the IR society – not much use to those looking to get into IR then. ‘People on the course would typically have a strong finance background,’ Millar notes. And this view is backed up by the IRS’ Jill Sargeant on the latest developments in the profession: ‘It’s becoming more finance-based,’ she says. ‘Investor relations officers must know how to speak to analysts and explain the financials.’
So what advice would a recruitment consultant offer someone looking to break into investor relations? ‘Come to me first,’ jokes Mounde. He adds that despite the need for an understanding of the financial issues, IROs should remain flexible in relation to the demands of new technology: ‘You need an understanding of technology as well as a head for figures, as you’ll need to advise on technology-based issues such as the IR web site and online IR strategy,’ he adds.
Evidently, the ideal IR candidate has a career history encompassing everything from journalism to corporate finance, good communications skills, an in-depth knowledge of technology, expertise in the relevant industry, and a familiarity with the peculiar workings of analysts’ minds. To accommodate all these abilities into your character you’ll either need to possess some form of business schizophrenia or be an all-action financial superbeing and guru with the communication skills and charm of a world leader. Oh, and a sense of humour.
Unlike people working in accountancy or law, there is no set career path for the aspiring IRO to follow. And rightly so. As the discipline of investor relations matures and evolves, IROs will take on new responsibilities and encounter new challenges that cannot be predicted – let alone solved – by textbooks.
But as far as the new recruits featured here go, Chandler Spears sums up their mood quite well. Is he enjoying his new job? ‘Absolutely.’
