The critical Cs of investor relations

by Ana Raman
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Investors live in a fast-paced world that is bombarded with information, opportunities, and a myriad of choices on where to invest their capital. Companies competing for this capital must plan their investor relations programs carefully to optimize their resources and maximize the impact of their messages to the investor community. The outreach to investors must capture their attention, leave a remarkable impression, and, finally, encourage that investor to act in a favourable manner.

As the IR lead, you have defined strategic objectives and are using a variety of tactics to achieve them, be it through your IR website, road shows, conferences, disclosure...and the list goes on. As you develop your tactical plan and activities, it's essential to keep the following critical Cs top of mind to effectively communicate your company's story and messages.

1. Craft clear, crisp messages
To me, a clear message is crisp, cohesive, and relevant. Investors love hearing simple yet meaningful messages with which they can identify and then proceed to link to their investment objectives. Developing messages to meet this need is easier said that done, and can take time, research and several iterations.

In my previous post Six steps to successfully communicate the value of your brand, I discussed the importance of identifying what value means to your stakeholder prior to developing your communications. In this case, your stakeholder is your target investor. So when you are developing your investor messages and materials, ask yourself, ‘what do your target investors value in their analysis and decision-making process and how can I help them achieve their goals?'

Some industries are quite technical, so keep in mind that some generalists may be looking at your company in their process to identify potential investments. Therefore, keep the language within you communications as simple as possible. Craft a story using this language so that it flows and makes it easy for your audience to connect the dots. Finally, make it relevant for your audience, so they know how they can use the information you have shared, and you can find out how to improve upon it.

You may find yourself in a bit of information overload as it may seem that all the information you've accumulated is important to your investors. It takes discipline and focus to boil down that amount of information and make it digestible for your audience. Test the clarity of your messages out with your colleagues and get feedback. Also, look at a variety of ways and channels to present your information, and don't be afraid to learn about and leverage technology.

2. Deliver messages in a consistent manner
Once you have crafted a clear message, it must be delivered in a consistent manner across all your materials and via all your chosen channels, including other company spokespeople. This calls for the alignment of messages to various stakeholder audiences. While your target stakeholder may be interested in different pieces of information, core messages should remain consistent to the strategy and the brand.

Internal collaboration is essential in aligning messages so that information is consistent and confidential information is not disclosed on a selective basis. Briefing notes and ?

Q&A documents help provide consistent responses to FAQs. And while you may go off script to tailor responses to the investor audience, the facts should remain just that – the facts, consistent to public disclosure.

In addition, you have an increased chance of leaving an impression with your audience by repeating a message in a clear and consistent fashion. Investors may even actively look for inconsistencies in messages delivered to try and glean additional information to give their assumptions and forecasts and edge. Consistency also gives way to credibility, which is discussed next.

3. Build and establish credibility
Have you ever heard the phrase, ‘I need to look into the whites of management's eyes before I make an investment decision?' I have on several occasions.

In essence, investors need to know whether management is a credible source of information and whether they can execute on the long-term strategy. Credibility is essential in building a positive reputation for both management and the organization. Credibility comes from different actions, including executing the company's stated strategy (aka doing what you said you would do) and meeting or exceeding expectations. It takes time to build a track record and the resulting credibility.

Credibility is also the result of delivering a clear and consistent message, communicating in a transparent fashion, and communicating what you said you would communicate (i.e. following up on questions and providing progress updates, if possible, and outcomes for stated outlooks).

4. Act with confidence
It's not just what you say, it's how you say it. Confidence is the quality that spokespeople, whether you are the investor relations officer, media relations lead, or management, need to effectively deliver a message. And remember, confidence is not arrogance.

The quality of a message delivered is reflected in verbal and non-verbal cues. Therefore, presentation training and practice are essential to become effective in message delivery. The improvements can be seen in how you articulate the story and responses, the tone that you use, and your body language. Seek training for individuals in your company who are responsible for speaking with the investor community.

Additionally, it's important to know your disclosure so well that you can deliver it in your sleep. Thorough familiarity with your disclosure gives you the power to stay on the right side of the conversation and know when to firmly draw the line during conversations with investors. This doesn't mean you have to clam up when a contentious question comes up, but at that point you are safe to confidently and calmly state that you are unable to provide certain information, which also gives you the opportunity to repeat core messaging on the issue.

Confidence is also demonstrated through your comfort with the skills required in your IR role. This leads to my fifth C, competence.

5. Improve competence (and confidence) through continuous learning
Competence is a result of experience, training, study, and practice. It's a continuous and rewarding process that you can improve through active learning. The greater your competence the better conversations and connections you will have with the investor community, whether it's about a financial or operational issue.

When it comes to hiring an investor relations officer, there is often a discussion or debate on what type of skills the individual should have. Should she be a financial-type, or perhaps more emphasis should be placed on communications expertise. Or as an alternative to both of these backgrounds, perhaps the individual should come from the company's operations, therefore having greater knowledge about the inner workings of the business and players in the industry.

Each type of background brings important skills to the IR role, but it would be extremely challenging to find someone with all these skills, unless they are a super-IRO! Most people who step into an IR role understand the importance of knowing the business, the numbers, being an effective communicator, and being competent enough to connect the dots across the different areas. That's why IROs should constantly be in learning mode to keep up with the conversations and add value to strategic discussions.

6. Have the courage to be candid
Conversations with the investor community are part of an IR practitioner's daily life. If the company is doing well and the outlook is positive, conversations may be pleasant and straightforward. However, every company faces challenges and tough conversations at some point in its business cycle. And that's when the courage to have candid conversations can be quite powerful.

Investors appreciate candor, especially in tough times. When they speak with IR and/or senior management, investors are not looking for scripted material. Instead, they want to have a frank discussion. Now more than ever, it's important to say what you mean and mean what you say.

This isn't always easy depending on the situation you find yourself in. As an IR practitioner, you are constantly aware of potential disclosure and liability issues. Being honest with the individual with whom you are having a discussion within legal boundaries can help you build that relationship and lends itself to trust and credibility.

If you are unable to answer a question, let them know that the information hasn't been disclosed, but tell them what you are able to say. It's important to take these unanswered questions back to your management team and to have the courage at that table to discuss how the company can deal with and communicate the tough issues. Perhaps you will find a way to provide some of the information that the market is seeking with balancing that disclosure within the comfort level of the business.

Keeping these critical Cs of investor relations in mind can help you craft and deliver impactful messages to the investor audience. This can lead to the building of respectful relationships and the enhancement of your financial brand.

Ana Raman

Ana is a strategic business and communications professional who has worked in small to large cap companies across several industries, advising management and developing effective communications programs to help businesses transform and execute their strategy. Her roots are in finance, a skill set she especially applies in her area of expertise – investor relations and financial communications.

Over the years, Ana has developed her capabilities across the PR spectrum and continues to do so – no PR or business topic is off limits. She is a curious thinker who is always seeking to learn how to become better, faster and stronger. Ana is based in Ottawa, Canada.

Contact Ana:
Twitter: @anakraman

This article was first published on (December 2014). Reproduced on by kind permission of Ana Raman.

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