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Investor Relations for the Modern CFO: Revitalizing Your IR Plan

By David Calusdian, President

As CFO, you wear many hats. Overseeing the core functions of accounting, tax, risk management and more, you also are increasingly expected to understand a myriad of new financial technologies. And while your knowledge of business and finance is encyclopedic, the truth is that stakeholders in and outside of your organization will inevitably judge you by your ability to communicate effectively and run a best-in-class investor relations program.

Over the past two years, we have seen arguably the greatest amount of change in IR. Many of today’s most successful CFOs are capitalizing on these changes to enhance their overall IR programs in unique and innovative ways.

At Sharon Merrill, we help CFOs to keep on top of these latest trends and best practices. Here are five tips for how you can drive improved valuation, build tighter relationships with Wall Street, and maintain the confidence of your board and CEO.

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1. Refresh your Investment Thesis.
Your investment thesis is the cornerstone of your company’s reason for being. It is a concise statement that explains the problem you solve, the unique value of that solution, your competitive advantage, how you generate cash and the market opportunity for your products or services. In short, it answers an investor’s first question: “Why should I buy your stock?” When refreshing your investment thesis, be sure to include not only the qualitative measures that support your argument but also such intangibles as management pedigrees and your company’s mission, vision and values.

2. Articulate an Achievable Growth Strategy.
Having a clear, consistent and measurable growth strategy gives investors confidence in your company’s long-term prospects – and their ability to profit from your performance. At Sharon Merrill, we typically recommend that clients prove out their strategy through short- and long-term milestones, both financial and operational. Update investors on these milestones regularly. This “report card” approach reinforces your company’s credibility by creating a simple yet comprehensive framework that is applicable across all of your communications.

3. Build ESG (Environmental, Social and Governance) Into the Narrative.
Embedding sound environmental, social and governance (ESG) practices into your operations is no longer optional. Indeed, ESG often is a primary screen that companies must pass before even being considered for investment. If your company does not have an ESG framework, we recommend that you begin the journey with these steps: 1) conduct a “materiality assessment” to understand the ESG areas of greatest importance to your stakeholders in evaluating your company, 2) develop measurable goals to address those areas, and 3) communicate your goals and ongoing progress across your investor communications regularly. See here for additional information on how we help executive teams build out effective ESG programs.

4. Feed Investors’ Growing Demand for Digital Communications.
COVID-19 accelerated the growth of video conferencing platforms and left an indelible lesson about the investment community’s appetite for communications: there is no such thing as too much. Online video tools are here to stay; leverage them to your advantage. Use virtual non-deal roadshows and Hybrid Investor Days to showcase the depth of your management team, including key executives from marketing, R&D and other functional areas. Conduct virtual tours to give investors a behind-the-scenes look at your company. Upload an investor presentation narrated by your CEO. Create videos that highlight key themes that enhance your competitiveness.

5. Unlock the Power of Storytelling.
Presented with two investment ideas, an investor will inevitably select the one that is communicated more effectively. And the secret to an effective idea is a good story. While putting the numbers into context and quantifying the outlook are indispensable skills for the CFO, you will come across as infinitely more credible by incorporating effective storytelling into your delivery. Presentation coaching can help you build confidence by internalizing key messages and employing pace, story structure and content. Body language and vocal control are essential elements of a powerful presentation, so be sure to work with someone experienced in delivery coaching.

With an international reputation as a preeminent strategic IR advisory firm, Sharon Merrill partners with IROs and the C-Suite to drive value for both external and internal stakeholders. For more than 35 years, clients have relied on our senior-level counsel and communications expertise to guide them through every challenge – and meet every opportunity. Whether you need to improve your IR program, manage a crisis, develop an ESG program or simply crystallize your story, we deliver measurable results through crisp messaging, effective executive presentation development and training, and high investor engagement. By leveraging sophisticated stakeholder communications and innovative digital media, we take a strategic approach to every situation to help you build enduring and value-creating relationships with the right audiences. Visit www.investorrelations.com for more information about working with Sharon Merrill.

Sharon Merrill Associates, CFO, Investor Relations, IR Trends, ESG

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