Q- I work for a mid-sized manufacturing company that had a very limited IR program prior to my joining last fall. One of the consequences of this is that I now spend a great deal of time educating senior management and employees on what the function does. Do you have any advice on how to educate internal audiences on IR?
A- This is actually a very common situation, especially in the small and mid-cap world. Even the largest and most sophisticated companies can have a management team that is fantastic at running the business, but which often falls short when it comes to knowing how IR can help the company.
I would start with a presentation to members of the management team, either one-on-one or as a group. Start with the basics about how IR should be considered part of the strategic planning process, and explain that the function is equal in importance to marketing, finance and other corporate disciplines. Work your way up to what this means for the company, using examples when appropriate.
Lastly, insert messages about IR’s importance in all your communications with management, adding IR insights to weekly, monthly and quarterly reports. You should include insights into various related matters such as the trading patterns of the company’s stock and analysis of investor inquiries and institutional holdings, as well as a review of how the company’s peers are performing.
Q- What’s the best way to handle a heavy inflow of retail investor queries? We’ve had several announcements recently that have caught the attention of our retail holders and have caused an influx of calls to our IR hotline. Our regular policy is to return calls within 24 hours but our staffing doesn’t allow for this when we have an unusually high volume of calls.
A- Consider taking a few of the most common queries and adding them to the FAQ section of your investor relations web site. If there are many questions, you might also want to consider a special dedicated section for the topic in question.
Some companies with a high percentage of retail ownership might want to consider separate FAQs for each press release, if warranted. I would also recommend altering your IR hotline voice message to include some dialogue about these FAQs and then direct callers to the FAQs on the site for further information. Just make sure you give people an option to immediately return to the hotline if they do not have a question related to the addition you have made.
Naturally, make sure the answers to these questions are run past legal to avoid any potential disclosure issues. As a best practice going forward, try to build these announcements with potential questions in mind so they can be proactively addressed in press releases, if possible.
