Q: As an IRO I feel I’m caught up in one-way traffic. Quarterly figures, annual meetings, analyst presentations – and that’s all before any transaction-generated announcements. What steps can I take to bring information in from the outside?
A: With frequent contact with both the buy side and the sell side, as well as other external audiences such as the press and the private investor, the opportunity to improve the efficacy of your company’s message is well within your grasp. Actively seeking out information on your peers and becoming a sector specialist yourself will allow you and your board to be better prepared for questioning at meetings and to tailor your message in outgoing communication more closely to your audience.
The easiest way to do this is to imagine you are a sell-side or buy-side analyst following the sector that your company’s in. What companies would you follow? Do you know as much about them as you would like? The information isn’t hard to get; the internet, public documents and press coverage will yield useful insights into what both the companies and the people who follow them think are the main issues for them and their industry. Having identified these, how are they relevant to your own company? How would you address questions on the same subject from your own perspective? What can you can say to preempt them?
You may do some or all of this already; or you may say you haven’t time with all the demands of the usual calendar of activities. But I suggest any good IRO should, in their own way, be as much of a sector expert as any analyst. Try writing a monthly paper for your board on issues in your industry, even if you don’t give it to them. Can you add value? You should be able to.
One shortcut to is to leverage existing relationships with sell-side analysts and fund managers. Do you receive – and read – all their research? Gate-crash your competitors’ meetings – this is easier than it sounds, especially now that more companies do conference calls and webcast them. If the call isn’t open to the public, get a tame sell-side analyst to let you join him in a meeting room as he dials in to the call. Or just go along to the meeting with him and claim to be a colleague – most of the time, you won’t even be asked who you are. Companies, no doubt including yours, frequently go into a broker’s office to present to an audience of salespeople, traders and invited fund management clients. These are rarely formal affairs so you should easily be able to go along if you’re friendly with the broker.
I am not advocating industrial espionage here – none of the information given out at any of these meetings is private, and in fact is all a matter of public record. What is more interesting is to see the questioning at the end of any presentation, and to think how your own senior management team could respond should they face the same line.
Finally, have a couple of standard questions that you ask everyone, buy or sell side, whenever they call with trivial information requests (what date the next results are due, where the CFO worked previously) or more knotty issues such as your social responsibility code. What do they think are the issues of the day in your sector? What company is seen to be the best investment opportunity and why? IROs should set out to be sector specialists par excellence. That way, you can better execute your primary responsibilities. Oh, and maybe even get a job on Wall Street one day as well.
E-mail questions to Heather McGregor – [email protected]. McGregor is a former IRO and investment analyst who currently works on IR assignments for Taylor:Bennett, an executive search firm specializing in communications jobs across Europe
