As an existing investor relations leader, how can you make sure that when you move on, the right talent to succeed you is close at hand? The answer is influenced by the size and structure of both your IR team and your organization.
A large FTSE 100 business can promote senior talent within the IR team, spot potential in the wider business, perhaps even as part of a formal management rotation scheme, or look externally in the capital markets community and among other IROs. You should have several internal avenues to consider and the opportunity to develop talent over some years prior to the succession need.
A smaller company can also explore the above options, but the internal talent pool is smaller, possibly even non-existent on the IR team side. It is more likely that an external hire may be made, who will have to get up to speed fast and fill your shoes without a handover period or much continuity for your existing team.
Crucial for all succession planning success is an early conversation with your CFO, CEO and HR function about what the next iteration of the IR function needs to deliver. Do you, together, feel a new perspective is needed, perhaps an analyst background, steeped in wider sector and capital markets understanding in order to complement an existing team member? Or do you want to continue in the existing, successful, style?
Management must be engaged in the appointment process, whether actively throughout or behind the scenes with only a later-stage meeting with candidates. In the case of external appointments, this approach will ensure you target the right type of candidate from the start. For both internal and external appointments, management support is essential; without that full understanding of management’s perspective you will be setting up your successor to fail. So where should you look?
Internal appointment: Build a network across your business. Start early, find the talent you want and fire it up with the merits of IR. Promising places to look are in IR, finance, strategy, business development (all both headquarters and divisional/regional). Ensure you approach the interview process with the same rigor you would an external appointment, and follow HR procedure. Moreover, management must ultimately be onside to achieve a successful internal promotion.
External appointment: Build a personal network in the IR community. It is a relatively close-knit group and you can get a good sense of where the recognized top talent is within the profession. Review ideas from your management and advisers, including brokers and financial PR, though beware candidates whose names will arise thanks to their excellent networks but may not be the right fit for your needs. Look at your analyst list in case you can make a targeted approach in that area. Finally, think about whether you need to appoint a professional search or recruitment firm to manage the process for you, provide independent feedback to internal candidates and ensure you consider the full range of appropriate talent.
The following tips should help your succession planning:
• During each recruitment process, take the opportunity to see at least one excellent ‘riser’ candidate. Could that individual join the business in a different role and return to manage IR later on?
• At every level, think about candidates who are versatile, and develop them; could your IR manager, tipped for the top job in the future, transfer to the finance team, take an international secondment, or work with communications, strategy or business development? Do not let these candidates get stuck without progression opportunities; there is a risk you will lose them to another organization, or that they will stay and cause the same problems for the next layer of talent.
Heather McGregor is managing director of executive recruitment firm Taylor Bennett
