‘There is no such thing as a typical day for me; things change very dramatically depending on what I have going on. However, I typically spend a fair amount of time on the phone speaking to analysts and investors and meeting with them in person. Depending on the purpose of the meeting, I will meet with them alone or with other members of management. I believe very strongly in the importance of these personal contacts in building relationships with the Street.
Over the last year, we have made a series of acquisitions in the US. We have been very involved in preparing for communicating those transactions – getting up to speed on what we are buying, positioning and preparing a presentation for the Street, ensuring that the key elements are covered, organizing a conference call to announce the acquisition and then fielding calls afterwards. This process can be very time consuming.
We also have internal meetings with members of my investor relations group and people within the bank to plan and implement initiatives. I also monitor what’s happening in the markets, paying particular attention to our competition. And I follow research on our company and our industry.
On top of all this, our IR department spends considerable time preparing for upcoming events: devising presentations (for banking conferences, in-house meetings, annual shareholders meeting, etc), documents for quarter-end disclosure, as well as drafting major sections of the annual report. I am involved in assisting my group in drafting or editing those documents. Our IR department is also responsible for rating agencies, so depending on the time of the year, I could be involved with rating agency meetings. With all this going on, you can see why I don’t have a ‘typical day or week’.
A little different
In 1986, I joined Royal Bank as part of a financial management training program. I spent three month-long stints working in different financial departments within the bank. My third assignment was in IR, and I had been fascinated with the group from day one. I was given a tour of the facilities when I was interviewed, and when we walked by investor relations, I asked what the group did and was told about the unique nature of their work. This piqued my interest.
After studying French literature and earning an MBA in finance, I was looking to combine business and communications. Investor relations sounded like the ideal spot for me, so I was thrilled when I got an opportunity to work in IR, beginning as an analyst. In those days, ‘analyst’ was the entry-level position in IR. Then I moved up to become a senior analyst, assistant manager, manager, vice president and since 1999, senior vice president.
Things have changed enormously within the bank since I started working in the 1980s. We have made several acquisitions, which have vastly expanded our operations both in size and in the scope of businesses we are in. In the late eighties, we bought the largest brokerage firm in Canada, Dominion Securities, which took us into the brokerage business. Then, in 1993, we bought the largest trust business in the country, Royal Trust, which took us into the wealth management business. Since then, we have made several insurance acquisitions.
Adjusting to change
For me as an IRO, expanding into new areas meant learning about new businesses, competitors, positioning and strategy. In order to give a clearer picture of our performance, we started segmenting our reporting by line of business in the mid-nineties. That change made for better communication with the Street as well as a better understanding of our various businesses.
As our organization grew we made other changes to our IR program. We expanded the disclosure of our quarterly results, going from one press release to four. Then in 1999, we started to report using US Gaap, but to make our numbers more comparable to other Canadian banks we continued to provide Canadian Gaap numbers.
We also accelerated the timetable for reporting our results – going from six weeks after quarter-end to about three weeks. We’re now putting out three times as much information as we once did, and in less than half the time. In 1995 we listed on the NYSE, meaning we now spend more time with the US investor population. Also, the development of the IR web site was time consuming in the early stages. The web site is now one of the most critical means of disseminating information – I can’t imagine how we managed without it.
We are a small group. I have five people working for me, including my assistant. In terms of responsibility, we have one person dealing with the transfer agent and retail shareholders, and another who follows the competition, particularly the Canadian competition. The rest of us are primarily responsible for communications with the professional investment community. The team works hard and is dedicated to continuous improvement.
Outside our team, many people throughout Royal Bank have lent their support to IR activities. The CEO and CFO have been particularly generous with their time and supportive of our efforts.
Fair disclosure
Over the years, I have seen the focus on shareholder value creation increase significantly – both within companies and on the Street. Pressures from the Street have risen noticeably, especially when it comes to disclosure. The SEC’s Reg FD has really changed the IR profession and the disclosure landscape within the last five months. We are very sensitive to the need to disclose material information as widely and as fairly as possible. This is something we always attempted to do, but now we are very careful to issue press releases before a major presentation in order to advise people about the event.
After we release our results every quarter, we have a conference call with the Street, which is webcast and available to all via toll-free phone in listen-only mode. Over a year ago, we started to invite the media to listen in to those conference calls.
I think dealing with Reg FD has been a real test of one’s experience. Knowing how to communicate messages in the fairest, most appropriate manner – and yet remain responsive to the Street – requires a certain level of expertise.
Time management is the biggest challenge of my job. Given the size and scope of our bank, staying informed about what is happening in the organization is time consuming. Also, maintaining relationships with the Street at a time when the list of contacts is getting longer and longer is tough.
To manage my time efficiently, I have learned to focus on what is most important. I sometimes get nearly a foot of paper a day, so if I tried to do absolutely everything every day, I would never go home. As it is, I take work home most weekends. So I have to decide what is the most critical, keeping investors well informed, constantly improving our practices, providing feedback to the CEO and CFO, and staying abreast of what is happening within the bank.
Attempting to build our international shareholder base, especially in the US, has been an added challenge. Some of the criteria investors use are beyond our control – such as the outlook for the Canadian currency or economy, or the inability for Canadian banks to merge easily. You can be the best bank in the country and they still may not buy your stock.
The rewards
I really enjoy taking a macro view of the organization – its strategy, financial and operational performance, and so forth. I also take pleasure in representing the company well and in developing excellent relations with the people on the Street. And I take pride in the quality of the people in my group.
When you feel that investors understand your organization, that they like it, think positively about its performance and outlook, and reward it with a superior valuation – that is the best reward for an IR professional. Basically, knowing that you have successfully communicated your story and got the best long-term sustainable value for your stock is very satisfying.’
