What I Wish I Knew When I Started in Investor Relations (Part I)

11 February 2020

By Karen Greene and Matt Tractenberg

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Perhaps one of the most interesting things about investor relations is that it’s a bit of a functional orphan. When you look across other functions in a typical business, whether it’s sales, marketing, finance, accounting, treasury, or HR, most of those folks have worked their way up to the leadership role of that function, through that function.  

The Chief Accounting Officer is an accountant. The person in charge of FP&A is a finance expert. The individual leading communications came up through communications and likely majored in journalism or communications. A completely unique aspect of our field is that there generally isn’t a clear path to the leadership position and no one goes to school to be an Investor Relations Officer (IRO). IROs can have very distinctive backgrounds, coming from marketing, the sell-side, treasury, communications, finance, or a host of other areas. 

Holding the title of IRO doesn’t necessarily mean someone has been practicing investor relations for decades or had much formal functional training. Nor is it a prerequisite. This unique situation makes peer advice even more valuable, so we reached out to Q4 clients to get their thoughts on what they wish they’d known when they started in IR. We realize that virtually none of our clients are fresh out of school or even new to their companies, but a good number may be new to their IR leadership position and might benefit from the experience of some of the best in the business.

What I wish someone had told me when I started out in investor relations

Wall Street knows there are many levels of IRO professionals. Even though they may have the same title at different companies, it often depends upon company size or the size of the IR department. The first level focuses on appropriate management meetings and what Wall Street is saying about the company. The second level also tracks market and competitive conditions and relays that back to the business to drive performance internally.  The third level develops and utilizes relationships across the business to solidify their position as a company spokesperson to the point where Wall Street is satisfied meeting with the IRO as a proxy for the CEO or CFO – enabling executives to focus on running the business. The best IROs build trusted relationships with the buy-side to support the company through highs and lows, ensure the company’s voice is represented in accurate sell-side reporting, and drive strategic relationships externally and internally that result in appropriate long-term expectations which allow the company, investors and analysts to all be successful.” – Laura Graves, Corporate VP, Investor Relations, AMD 

We all strive to gain that golden “seat at the table” that Laura alludes to in the last level. To be viewed as a strategic partner to both leadership and the street. However, to get there, the basics must be met first. Facilitation of successful engagement between executives and investors is not a low-value activity. It takes planning and process. Each of the levels that Laura mentions should be viewed as building blocks in one’s career. We should master those skills before moving on to the next. This results in a well-rounded IRO who views his/her role holistically and delivers value through the full business cycle. 

“I’ve benefited from working in IR roles across multiple companies in different industries with different business models. Looking back now at my first assignment in Investor Relations, I wish someone had told me to think about my company from an investor’s perspective. Taking this approach helps IR practitioners provide constructive coaching and feedback to senior management, it drives more transparency and credibility in messaging to investors, and it can even help in decision-making when considering job/company changes. Perhaps most importantly, it fosters an unbiased view of the positive and negative perceptions of your company with clarity on how to best address them.” – John Nunziotti (Corporate Relationships, IEX)

Putting yourself in the shoes of the investor can change the way you do your job. In many companies, equity comp is offered, so we really are owners. This approach encourages consistency and candid conversation. It also leads to stronger relationships with your investors as alignment of interest becomes obvious to all involved.   

“There’s no such thing as perfect IR – it can differ substantially from company to company, industry to industry and a great deal depends on your senior management and legal counsel.  It can also be a lonely role within a company, which is why I wish I’d joined NIRI earlier on!  Finally, it’s an always evolving profession, so it pays to stay on top – and ahead, if possible – of the changes as they occur.” – Ruth Venning,(Executive Director, Horizon)

I love the fact that Ruth, who is so well respected in the IR community, reminds us that perfect IR doesn’t exist. We all come to the role with different backgrounds, different skills, and operate in very different environments. Tailoring your program to the needs of your executive team, industry, and investors is wonderful advice, and will result in efficient delivery of a strategy designed just for you. I also echo her remarks on NIRI. I continue to use the community as a sounding board, to remain aware of trends, regulations, and approaches. So get out there and network! 

 And here are a couple of thoughts from us:

 “Don’t try to create your IR story in a vacuum. Make sure you tap into the business leaders of your organization for their perspectives of the business – where it is headed, what their concerns and challenges are, what they are bullish about. And spend time in your business units to glean additional insights. This will enrich and ensure a more authentic, holistic representation of your company to investors.” – Karen

While the IRO is charged with framing and communicating the investment thesis, business milestone and outlook, and overall financial performance of the company it doesn’t mean the IRO needs to do it alone. Use your team to test the validity of how you would tell the story, and be open to pushback and suggestions. 

“Your brand and reputation is built upon personal and professional integrity. You will carry your reputation with you throughout your career. Always ensure you are truthful, transparent, and professional. Investors will place more value on your words than other sources if you’ve gained their trust and shown them you value it.”  – Matt

The concept of a “personal brand” was always a bit corny to me. What am I, a washing machine? In truth, the IR community and Wall Street are industries that rely on relationships and reputation. Ensuring that you remain honest, candid, and help achieve common goals will pay back in spades as you make your way through your career. Take good care of those around you, and they’ll do the same for you. 

Pay Attention to the soft skills

As you can see, very little of this advice fits into the hard skills category, and there’s good reason for this. The IR professionals we work with on a regular basis are smart, conscientious folks who have been plucked out of other functional areas because they have some combination of skills that make them well suited to IR. What these and other successful IROs understand is that paying attention to the soft skills is what can truly make a difference in your career.

We’re happy to bring you these insights and key learnings. We see this as a very valuable conversation. Check back for Part II of this series where we’ll bring you additional advice and wisdom from other Q4 clients and industry luminaries. Or check out Leveraging Strategic Targeting to Maximize IR Resources, written by Karen, for more valuable insights.

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