Earlier this week I moderated a NIRI webinar with three senior-level investor relations officers representing the finance, real estate and retail industries. The panelists highlighted some new initiatives that IROs should consider in 2010 which, according to the Chinese calendar, is The Year of the Tiger. This just might have been the world’s only “Tiger”-related discussion in the past few weeks that had nothing to do with a certain golfer with a PR problem.
Within Chinese culture the number six is auspicious and considered good for business. So in keeping with this theme, here are six ideas that arose from the panel discussion that are worth considering as you develop your investor relations plan for the coming year.
1) Provide deeper context for your guidance: The age-old debate on whether companies should provide quarterly, annual or no guidance rages on, but one thing is clear. If you do provide guidance, make sure that you provide the assumptions underlying that guidance. This not only helps investors and analysts get a better sense of how you derived your estimates; it also provides a layer of protection if any of your assumptions do not materialize.
2) Post quarterly prepared remarks online: Try posting your prepared remarks for quarterly conference calls on your company’s website either in advance or immediately after the call. This way, analysts won’t have to ask as many of the “housekeeping” questions that typically crowd out the more desirable strategic dialogue during Q&A sessions and the follow up calls. Adding supplementary tables and data to the quarterly press release can reinforce this effect.
3) Consider recording prepared remarks in advance: Companies that pre-record their management team’s prepared remarks for quarterly conference calls are convinced that this not only reduces management’s stress level the day of the call, but also eliminates last minute wordsmithing, allowing the team to be more prepared to tackle the important Q&A session.
4) Harness the power of your website: The buy-side wants to see more information posted on companies’ IR websites. One of the IROs on the panel said they are embarking on a complete overhaul of their site to ensure that it remains fresh and appealing. Another panelist noted that her company is now posting virtual facility tours on their IR website – thus eliminating travel costs for the Street and saving management’s time. Thus far, these online tours have been very well received.
5) Maximize the value of your marketing outreach: Some IROs believe that participating in investor conferences where management delivers a standard 20-minute IR pitch is not the most effective use of their time, especially since most companies post their investor presentations on their IR websites. A better alternative is to attend conferences with a “fireside chat” format. Fireside chats are often more valuable for both management and investors because they facilitate an interactive dialogue. Another way to maximize management’s time in one-on-ones is by thoroughly screening meeting candidates. Make sure that the sell-side or your IR firm is putting you in front of investors who are most likely to take a position in your company.
6) Get in front of your board of directors: The more you interface directly with your board of directors – by providing them a quarterly IR update, for instance – the more you will amplify the value of your position as IRO. Update topics could include competitive intelligence, industry trends and analysis, investor feedback and concerns, share price performance and shareholder identification and trends.
Wishing you good fortune in the coming year.
President & Partner