Edelman’s investor relations team had the pleasure of attending NIRI 2022 in Boston—NIRI’s first in-person annual conference since 2019. We had the chance to reconnect with fellow IR professionals and host a workshop on best-in-class public speaking strategies. This year’s annual conference felt particularly timely, as companies face yet another set of challenges; inflationary pressures and looming concerns of a recession are making the role of investor relations more challenging and even more critical. As companies prepare to report Q2 earnings over the next two months, our team distilled our top takeaways below to help investor relations officers (“IROs”) be more effective, focused and proactive communicators during these unpredictable times.
- Start by Listening
Keep a pulse on the Street’s perspective by staying in close contact with your buy- and sell-side analysts and ensuring conversations are a two-way street. Begin and end meetings by asking the right questions. To start: What are you most interested in regarding our company? What would be most helpful to understand about our organization? End with: What do you need from us in order to make an investment decision? Take the opportunity to understand the Street’s expectations and feedback on current disclosures: Are you looking for more or better disclosure from our company? Do you need a deeper set of metrics to understand our story? Are there key risks you feel we have not adequately discussed or addressed? Opening the lines of communication for feedback and dialogue will enable you to make the meeting most productive for all parties and provide you with critical insights to inform your IR strategy and potentially share with your management team.
- The Street Knows All Is Not Rosy—Don’t Pretend That It Is
Investor relations sits at the intersection of a variety of stakeholder communications and business operations. IR is also the first line of communication for many investors who value trust and transparency as they work to make investment decisions. Ensuring you can deliver messages—both negative and positive, internally and externally—is crucial to your role and the success of your strategy. Investors understand companies continue to navigate uncharted waters and naturally, this will come with headwinds. Rather than trying to bury the negative, acknowledge the challenges facing your industry and how your company is positioned to mitigate these moving forward. This will give you an opportunity to own the narrative rather than reactively responding to the assumptions of others.
- Act as a Conduit of Information for Management
Complementary to shareholder communication, with direct access to management, the IR team has a unique opportunity to relay feedback to leadership and influence strategy and messaging moving forward. When communicating investment community feedback to the management team and Board, plan to share both positive feedback and constructive criticism. It is imperative that management teams understand what messages are resonating well in addition to areas of concern, especially amidst volatility. This will enable you to proactively formulate a plan to tackle perceived gaps in the future.
- Prioritize Relationships with Current Shareholders
Investor marketing has changed significantly from the pre-COVID era. With a host of volatile macro factors to contend with, investors are keenly focused on managing their current portfolios as opposed to looking for new investment opportunities. It is important that this not be misconstrued as disinterest as you advance your investor targeting efforts. Reframe your near-term goals and take this time to level set management’s expectations for marketing during the balance of the year. Pivot from pursuing new investors as a primary focus to maintaining strong relationships with existing investors. Make certain you are giving your top shareholders attention, time and reassurance. Re-engage with current shareholders you haven’t connected with in a few quarters. Long-term holders are essential to your go-forward strategy and stability. Staying in front of them during difficult periods will help build trust and their understanding of your strategic plans.
- Recalibrate Your Investment Narrative and Focus on Differentiators
In a time where macro concerns and market volatility are largely outweighing positive performance and corporate news, it is important to find ways to stand out in the crowd. Use this as a moment to recalibrate your investment narrative to address analyst and investor feedback and concerns. Ensure your investors understand how you are uniquely positioned to mitigate the current challenges and succeed moving forward. Your investor narrative should summarize your market opportunity, highlight your competitive advantages, outline your growth strategy, explain how value will be unlocked and counter any potential misconceptions. A strong track record of performance, how the company can win against its peers, and the strength of the leadership team must all shine through. Lean into what differentiates your company across these buckets and, therefore, what makes an attractive investment opportunity for investors.
Importantly, make the time to practice the delivery of that investment narrative. During #NIRI2022, Edelman hosted a public speaking workshop designed to empower IROs to present their investment narrative confidently and pivot on difficult questions. Investor relations is the first point of contact for investors, so having a powerful, consistent story coupled with a strong delivery will be key in setting your company apart. Additionally, every question provides an opportunity to bridge to a key message you want your audience to remember.
Today, the role of investor relations is more vital than ever to the financial health and well-being of companies. In integrating the above steps into your daily responsibilities as an IR professional, you can ensure that you’re making incremental progress, staying ahead of the crowd and differentiating yourself from your peers.
Ashley Firlan is Vice President, Financial, in Edelman New York.
Nicole Briguet is Vice President, Financial, in Edelman New York.