Our Blog: The Podium

By Dennis Walsh, Senior Consultant & Director of Social Media

Last week, I attended the NIRI Annual Conference. It was very educational and an incredible opportunity to meet and exchange ideas with many of the approximately 1,300 investor relations professionals from more than 20 countries that attended the event in Seattle.

NIRI organized more than 45 informative panel sessions and workshops that were led by some of IR’s top influencers. While I wanted to attend each one, unfortunately I am not omnipresent. For those that I did attend, I left with several key takeaways that can benefit any IR program and wanted to share those with you here at The Podium.

By Dennis Walsh, Senior Consultant & Director of Social Media

As another year comes to a close, two things are probably on every IRO’s mind: New Year’s resolutions and next year’s investor relations plan. Every year, one of the most common resolutions is to get fit. People spend a tremendous amount of time and money developing new health and fitness plans to achieve that goal. This year, apply the same techniques to your IR plan in order to have a successful 2012.

Establish Achievable Goals

You may not be ready to compete in the Arnold Classic body building competition next year, but fitting into that new bathing suit by summer is certainly a realistic goal. When developing your 2012 IR plan, set equally realistic expectations. For example, expecting to grow your capitalization from a mid-cap to a large-cap in just a few months is likely an unrealistic benchmark. Instead, focus on more achievable metrics, such as meeting with a greater number of investors, attending more conferences, or increasing trading volume. Meeting these goals will support your ultimate goal of maximizing shareholder value.

“View from the C-Suite: What Management Wants from Investor Relations” was the theme for NIRI Boston’s April event. For a chance to listen to a panel of C-level executives speak candidly to a room full of investor relations professionals, I quickly reserved a car and “zipped” over to the meeting. The panel featured three esteemed executives from the region, including Richard F. Pops, Chairman, President & Chief Executive Officer, Alkermes; David D.R. Hargreaves, Chief Operating Officer, Hasbro and Donald Muir, Chief Financial Officer, Lionbridge.

The audience was eager to hear what these top executives expect from a strong IR team. The panel consistently reinforced that IR professionals are most effective when they are knowledgeable, well organized, involved in strategic planning, and are able to stand up to management to ensure best practice.

In politics, there is an age-old debate as to whether elected leaders should vote according to the wishes of their constituents, or vote their conscience as the people’s representative. We have seen politicians criticized for using polling too extensively to guide policy (see Bill Clinton) -- and not enough (see Barack Obama). When I worked as a political consultant prior to entering the IR profession, we used polling to gauge the electorate’s opinions on a certain issue – not to change policy, but to determine what audiences need focused communication and how messaging should be used to address misperceptions. And this is exactly how IR practitioners should use our own version of polling – the investor perception audit.

I recently had the pleasure of being interviewed about investor perception audits by Broc Romanek of TheCorporateCounsel.net. The podcast is available here. An investor perception audit is a survey of a company’s capital markets audiences – past, current and potential institutional investors as well as sell-side analysts. Typically conducted by a third-party via telephone to protect anonymity, the perception audit usually includes questions about the company’s strategy, prospects for growth, communications, management strengths, and catalysts for investors to purchase stock, among others. Think you already know what they perceive about your company? Certainly, investors and analysts are usually not shy about voicing their opinions. However, many companies are often surprised at the feedback they receive when investors are not speaking face-to-face with management.

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.

To whom is the corporation accountable? Before SOX, majority voting, proxy access and “say on pay,” director elections were democratic in name only, and the lines between board and management were blurry at best. Except for the occasional gadfly at an annual meeting, boards rarely communicated with shareholders directly.

Today, after nearly a decade of turmoil in the markets and changes in the regulatory environment, the insulated board is a thing of the past. Shareholders are coming to view directors as leaders whose perspectives may diverge from those of management, who are empowered to exercise independent judgment on matters of consequence, and who are accountable for corporate performance.

A small but growing number of boards, recognizing that investor expectations have changed, have made dialogue with shareholders a formal priority. They are experimenting with new approaches for nurturing this interaction and learning from the experience. Although systematic programs for board-shareholder communications are still atypical in Corporate America, it is not too early to make some observations about what the more successful efforts have in common.