A version of this post was featured in IR Magazine.

Investor relations professionals are constantly faced with the challenge of balancing demand from the Street with their own internal constituents. This battle is magnified for IROs of large and mega-cap companies that have extensive sell-side coverage and thousands of institutional shareholders all jockeying to speak with management.

In this scenario, public companies must think strategically about how to execute an IR plan that effectively engages the investment community, manages the resources of the C-suite and maximizes the overall return on investment of its financial communications outreach.

In efforts to provide clients recommendations of how to build a best-in-class investor relations program, Edelman’s Financial Communications and Capital Markets team conducted a review of 10 blue-chip U.S.-based companies with an average market-cap of approximately $200 billion. The review includes in-depth interviews with heads of IR as well as a comprehensive assessment of all IR programming to learn how some of the world’s most-followed companies effectively communicate with the investment community. A large portion of the insights gleaned from the research are applicable to companies across all market caps and offer interesting insight into what skill sets and resources are required to execute an effective IR strategy in today’s fast-paced investment environment.

A few takeaways from the analysis include:

  • Structure: A company’s ability to adequately navigate the public markets is heavily dependent on the breadth and capabilities of its IR team. Many IROs recommended implementing a 2-3 year rotational program for mid-level IR staff, drawing generally from candidates with previous FP&A experience. Edelman found that there was limited consistency around how IR teams delegate the responsibility of investor outreach. Many agreed that it was a matter of bandwidth and which IR team member had the most established relationship with a specific analyst and/or investor.
  • Buy and Sell-Side Outreach: While responses varied on how to best manage sell-side and buy-side interest, the one consistent message was IR’s overreaching goal to carefully and selectively prioritize executive management’s time when it came to interacting with the Street. A common trend among IROs is to cut back on participating in sell-side conferences and broker hosted NDRs, noting a drain on management’s time and diminishing ROI. With that said, IR teams are moving towards hosting more events at their company headquarters, where they can leverage having senior management centrally located.
  • Quarterly Earnings: Amid continued efforts to enhance the process in which companies report earnings, all respondents stressed consistency as being their top priority. In terms of the press release, it’s a matter of understanding what key metrics the Street uses to evaluate performance and make the content easy to obtain and analyze. Additionally, the use of infographics within press releases is becoming increasingly popular as a means to improve disclosure.
  • Social Media: Approximately half of those we spoke to use some level of social media as a means to deliver investor focused content. IR has found success leveraging existing corporate social media platforms to amplify major announcements that would be of interest to the investment community.

Lastly, the issue of corporate governance has become a larger part of IR’s communication strategy. The timing of shareholder engagement around governance topics has expanded beyond just proxy season with most respondents mentioning the implementation of a full-year campaign to discuss topics related to executive compensation and overall improvements in corporate governance policies.

Ted McHugh, vice president, Financial Communications and Capital Markets in New York.