At a recent roundtable event in Copenhagen, Q4 brought together a group of Investor Relations professionals to discuss the importance of building an effective communications strategy.
During the discussion, the group uncovered the critical components required to ensure that stakeholders have a complete and accurate understanding of business operations and activities, as well as its strategy and future prospects. An impactful strategy builds investor confidence, all while enhancing transparency.
While there are several ways to measure the success of a communications strategy, some of the most critical include a well understood equity story; a reputation for delivering on promises; and a supportive investor base.
Effective cross-functional Collaboration
Every part of an organisation will more than likely have competing communications priorities. This is why cross-functional collaboration is key to ensure alignment.
The success of an IR (Investor Relations) communications plan is dependent on the development of a consistent strategic narrative, followed by coordinated effort across multiple departments. The group agreed that it is also best practice for companies to establish common ground across internal departments when creating the KPIs by which to measure impact.
Beyond just the financials, attendees found that the inclusion of storytelling and themes emanating from the communications department often helped to address issues head on, resulting in enhanced transparency which led to a positive perception among analysts — ultimately leading to investment.
Messaging
To create an effective communications strategy, organisations should ensure that their messaging is not self-serving, but rather that it is focused on the questions and issues raised by investors and the public.
By asking questions such as what do you need to see more of? Where are you lacking information? And where do you need more transparency?, organisations can better prepare to create messaging that addresses the needs of their audience.
It’s crucial to ensure that your messaging is addressing recurring investor concerns. By providing a space for investors to ask questions such as via a public Q&A or monitoring a chat site, you can gain better insight into what your audience cares most about and ensure that it is reflected in your messaging.
Ensure adaptability
Most companies offer guidance on strategy in the medium team (2-5 years), but should there be substantive changes within an organisation (management changes for example), it is crucial to ensure consistency of messaging within IR communications — this can often take the form of a communication recovery plan.
Influence on management
IR influence on senior management has increased significantly. But their influence often depends on time in role, for example, someone new to IR will likely be more focused on the fundamentals (regulatory requirements, quarterly results presentations, etc.)
The maturity of work streams change as you develop in the IR function. The more senior the IRO, the more influence they can have on the development of the company strategy, more specifically on target setting (operational and financial) to align with external comms, and equity story.
Technology
The group agreed that it’s critical to ensure that you’re not only communicating with the market around results and CMDs, but that you continue to maintain an honest and consistent newsflow.
In addition to magazine, website interviews, contact with journalists, and working alongside PR firms, technology can play a key role in this.
A well-designed and informative website serves as a central hub for retail investors to learn about a business and its investment offerings. It should be user-friendly, visually appealing, and provide comprehensive information about products, services, and the investment process.
It was also noted that technology improvements have led to greater access to the management team and more impactful comms. One way that this can be seen is in smaller companies. They have been able to be more creative in how they present their leadership team and messaging through different mediums such as videos, podcasts, etc.
Retail audience
Retail investors are often bombarded with information, so it is essential to cut through the noise and capture their attention. A lot of retail investors have to rely on publicly available information for investment decisions, so making sure that your website is as up-to-date as possible is very important. This may also help to reduce the amount of time spent by IR teams responding to requests.
It’s critical to cater to retail audiences via retail presentations and not to just expect them to watch recordings of the analyst presentations. IR teams may also look to leverage the marketing budget for social engagement. Social media platforms can be used to connect to retail investors, journalists and commentators. Investors are increasingly using SoMe platforms such as LinkedIn and X (formerly known as Twitter).
One best practice shared by the group was to create organic social media content from results presentations or company announcements. This way you can leverage the content that you’ve already built to reach a broader audience. It was also noted that institutional investors will often watch retail presentations to assess sentiment and see if and how management engages with the retail and private communities.
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