Insight's newsletter on IR communication trends

To know how to get where you want to be, first you need to know where you are.

If you’re serious about doing this properly, get executive sign-off before you even start the audit process. You need a mandate from the highest level if this audit is to be meaningful and then taken seriously.

The purpose of the audit itself is to realistically analyse what the value associations are likely to be amongst capital markets, analysts, media, competitors, fund managers and retail investors. It matters. Because how they perceive you decides how they rate you, write about you, think about you, compare you and, of course, buy, sell or recommend your stock. Look carefully at what they’re saying – at the good things, and at the things they’re concerned or confused about.

Don’t stop there though. Take a similar line of enquiry internally. Talk to your own people about your disclosures, releases, presentations and publications. Put out a management questionnaire and then interview key decision makers for internal perceptions. Better still, outsource this so that you get objective feedback. And then feed the results back to the senior leadership team in a formalised report containing clear conclusions.

Here are the two things we reckon you should focus on:

1. Competitiveness. What’s the true state of your story? To get a real sense of that, review all the industry data and critique your competitors’ investment brand perceptions. How do they shape up – and how do you shape up against them?
2. Communication. Dennis Walsh, Senior Consultant & Director of Social Media at Sharon Merrill, says successful investor relations programmes depend on access and quality information. According to Walsh, in order for a company to have a truly successful IR programme, management must be accessible and the IR team must be responsive and well-informed. Here’s what buy-side analysts told Sharon Merrill they were looking for:

• Clear and honest communication about the intricacies of the business and the long-term fundamental outlook
• Honesty, availability and consistency
• Compelling reasons to own the stock, not just data
• A well organised IR website. (See our four previous issues on best-practice IR websites)

In other words, influencers wants access to management and they want informative answers to their questions. Surprise, surprise! But are you actually delivering what they say they most need?

When you look at what you’re doing right now, and if you analyse things like your past presentations, publications and press releases, how well are you doing those things – and what influence (good or bad) are your efforts having on your brand? Are you doing better than your competitors – or can you take a lesson or two from them?

We asked Annabel Cotton at Merlin Consulting for her views on how to go about this. She told us: “Our perception studies utilise both quantitative and qualitative techniques to identify and measure investor sentiment and are tailored to specific needs and objectives. A number of the questions we ask draw out investor views on the strengths or weaknesses of the company’s reputation. We help them understand not only how the company is regarded, but also what needs to be done to lift its standing with investors and address matters that are causing the cost of equity to be higher than it needs to be.”

According to Annabel, “Implementing the recommendations should, over time, lead to a reduction in the gap between the share price and analysts’ valuations, and lower share price volatility.”

They seem like good reasons to us.

That’s it.

Mike Tisdall
Investor Communications specialist and Managing Director – Insight Communications

Copyright © Insight Creative Communications 2011 You're welcome to share this newsletter with others either by emailing it to them or by printing it. You are also welcome to share and socialise the ideas contained in IR Insights. All we ask is that you provide an appropriate attribution.

Privacy: You're receiving this IR Insights newsletter because you are a client or contact of Insight and/or because you attended an AIRA conference or event at which we were a sponsor.

We respect and protect your privacy. We will not rent or sell your name and contact details to anyone at any time.