The idea of combining investor relations with corporate communications, media relations and/or internal communications is not new. Some organizations have had a unified communications department since day one. Though there are examples of integrated departments in organizations of all sizes, small and micro-cap companies were the first to really accept the combined communications format. In truth, this act was often one of necessity rather than design. One professional was given many hats, a small budget, and a great deal of latitude to get the word out to all appropriate audiences.
Today many companies that started this way have been able to increase their staff and budget, yet they retain the one-department structure. Why hasn’t a change in structure occurred with expansion? Most cite the benefits of a consistent approach to communications and a direct line to senior management.
For many IROs, contact with the CEO or CFO has always been a benefit of their position. As a whole, however, the unified communications front reduces the number of individuals vying for executives’ attention, allowing the team more quality time with management to discuss large-scale projects, actually execute the ideas and reinforce the overall communications requirements.
Debra Wasser, vice president of corporate communications and investor relations at Veeco Instruments, comments, ‘The best argument for combining investor relations and corporate communications is the consistency of messages. It furthers the cause of establishing or perhaps enhancing the company’s brand, and it can even result in increased shareholder value. Ultimately, all audiences are interconnected and it is good for the company to speak with one voice. It helps build the corporate brand when all audiences hear the same messages.’
In Veeco’s case, marketing communications, which Wasser says is very ‘product specific’, is a separate department. The two communications departments both report directly to the CEO and have a ‘dotted line’ reporting structure with each other to ensure that neither is left out of the loop as announcements are made.
Up-scale
Some large corporations have embraced the integration of investor relations and corporate communications. Though they certainly have the manpower to maintain larger, separate departments, they have chosen to unify communications under one umbrella.
One organization with a successfully incorporated communications department is Avon Products. As a global company with over 230 mn shares outstanding, over 3.4mn sales representatives, thousands of employees and hundreds of product offerings, Avon has a great deal to communicate. The company’s communications department consists of a team of 40-plus professionals focused on effectively sharing Avon’s story with a variety of audiences. Within the department there are specialized groups in areas such as public relations and sales, events marketing, investor relations, financial communications, corporate/foundation programs and internal communications.
Avon’s vice president of investor relations, Carol Murray-Negron, explains: ‘It is working because there are no barriers. The feeling was that all messages needed to be consistent and in sync with the messages communicated to investors. The department works seamlessly under the leadership of the senior vice president of corporate communications who has broad experience in investor relations, financial communications and internal communications, and who understands where crossover messaging works.’
Agency model
On the agency side it is natural to combine investor relations, corporate identity and media relations. When in-house practitioners turn to an outside consultant, often they are looking for more than one area of expertise. Agencies provide this diversified support via cohesive client teams where each member has a niche role that is directly related to a comprehensive communications plan. How the work is segmented may vary among firms, but often one team member is focused on corporate messaging and then is tied in with others that handle institutional and financial media outreach.
‘The audiences a public company addresses today are highly integrated,’ explains Brian Maude, an account supervisor at Noonan Russo, an international communications firm specializing in biotech and healthcare. ‘The general public has gained a strong interest in the financial media. Not only are institutional investors reading the Wall Street Journal and watching CNBC, but so are companies’ employees, vendors and local community leaders. This means a company has to be sure to maintain message consistency.’
When addressing the issue of how a one-person department can handle multiple constituents, Veeco’s Debra Wasser offers this view: ‘I find agencies to be a cost-effective way of getting third-party insight as well as the arms and legs I don’t have in-house. I think the contacts and experiences that agencies bring to the table are extremely difficult to replicate in-house.’
Career growth
Laura Holmes, an organizational communications and change consultant with Smythe Dorward Lambert, discussed the importance of an integrated approach when dealing with senior management during Niri’s annual conference in June. ‘To be successful you really need the backing of senior leaders in the company,’ Holmes said. ‘You can use key change events as an opportunity to prove the value of an integrated communications approach. If you are managing the relationship with the investment community and you want shareholder value to increase and the employee population or the customer population is not happy with the organization for any reason, that is going to impact your job and the kinds of conversations you have on a daily basis.’
Robert Woodrum, managing director of headhunter firm Korn Ferry International’s corporate communications practice, added: ‘Today, with all of the changes in the business world and particularly with Regulation FD, responsibility for communicating with almost all of a company’s constituencies can now logically be assigned to investor relations executives. We have seen more companies hiring or promoting investor relations executives into the top corporate communications position. They want people who will address multiple audiences and maintain consistent messages.’
He continued, ‘Regulation FD has provided an unparalleled opportunity to broaden responsibilities and give IR the charter to manage all of a company’s communications, which is a significant expansion of responsibilities.’ Woodrum believes if investor relations officers don’t broaden their responsibilities they risk being left behind. The trend will be for corporations to have one senior executive responsible for all communications, with multiple executives reporting to them.
Many IROs are leery of direct media contact because this is an audience they may not have had a great deal of experience with. During the Niri annual conference, McClain Communications president Brenda McClain addressed this when she argued that reporters are not themselves the audience; they are a conduit to the financial community who read a particular publication. ‘The press may now have a stronger presence on Wall Street, but you as the communications expert have the power. It is your understanding of the news and your representation of the corporate message that they will need to do their job properly,’ she added.
Sara Wilkins, vice president of investor relations and corporate communications at Marex, believes the media can help IROs expand their audiences. ‘The dynamics of the marketplace have put more pressure on us for a timely message – with tremendous retail investor interest, you can’t separate news and media communications efforts from investor relations. You also have to look at it from a crisis communications side as well: Who is going to be the communicator during a crisis? You want that person to be able to understand what will happen in the marketplace.’
The unified approach, when viewed from a time-management perspective, makes sense. CEOs do not have time to think about which communications professional they should turn to for support during a crisis versus an interview versus corporate earnings announcements. IR, corporate communications, public relations, branding and employee communications all strive to establish relevance; they spend time fine-tuning messaging for their constituents, and then execute in order to get the word out.
This leads many to wonder why personnel in any of these areas would choose to work isolated from each other.
In addition to the career growth benefits, there is a strong sense of security and work satisfaction among those who hold multiple communications roles within an organization. The integrated communications structure has allowed them to expand upon their skill sets, take control of the corporate message and ensure that it permeates all aspects of communications. It also helps secure their role as key members of senior management. Within their organizations their value increases because they are the keepers of the complete corporate story.
As Marex’s Sara Wilkins explains, ‘This is the best experience I have ever had in terms of flexibility and freedom from micro-management. I have the freedom to represent my company to multiple audiences. I thrive in the multi-tasked department. Juggling all the balls is challenging, yet it makes it easier to know that the message is consistent. I want to know that any time the company talks, it is my message.’
