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

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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 in that profession via a combination of targeted experience and education. 

A unique aspect of investor relations, however, is that in our field there generally isn’t a clear path to the leadership position, and no one goes to school to be an Investor Relations Officer (IRO). As a result, IROs come from a widely diverse set of backgrounds including marketing, the sell-side, treasury, communications, finance, or a host of other areas. 

This situation makes peer advice even more valuable for IROs who are starting anew position. We reached out to Q4 clients to get their thoughts on what they wish they’d known when they started in IR.

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 and be viewed as a strategic partner to both leadership and the Street. The first two levels that Laura mentions should be viewed as building blocks in a career trajectory to become a successful leader running an IR team. This approach ultimately results in a well-rounded IRO who functions as a valued proxy for both a CFO and even a CEO to investors and the Street.

"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 Nunziati (Corporate Relationships, IEX)

Putting yourself in the shoes of the investor is something every investor relations professional needs to understand. So often, we see that companies talk about what they want to talk about, which is not necessarily what investors are thinking about. By encouraging an investor-based thought process, this approach catalyzes 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 reminds us that perfect IR doesn’t exist. 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 your company. In addition, industry and professional organizations can be critical. For instance, the most recent NIRI conference gave us some great insight into the future of IR strategies. I continue to use the community as a sounding board, to remain aware of trends, regulations, and approaches. So get out there and network!

While the IRO is charged with framing and communicating the investment thesis, business milestones, future outlook, and overall financial performance of the company, that doesn’t mean the IRO needs to do it alone. Today’s IROs use multiple, internal colleagues across their organizations to test the validity of how they tell the company’s story. They’re open to pushback and suggestions. 

The IR community and Wall Street rely on relationships and reputation. One way to prepare yourself for being an IRO is to ensure that you remain honest, candid, and help the organization and your stakeholders achieve common goals. This 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 a 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 a special combination of skills that make them well suited to investor relations. One of the things that  these and other successful IROs understand is that paying attention to the soft skills is what can truly make a difference in their careers.

Check back for Part 2 of this series, where we’ll bring you additional advice and wisdom from other Q4 clients and industry luminaries. Interested in more thought leadership from Q4? Check out our additional blogs.

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