Implementing an Optimal Investor Relations Program to Foster Mutual Growth Opportunities

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Implementing an Optimal Investor Relations
Program to Foster Mutual Growth Opportunities
Annual International PR Communications
Conference PR Society Indonesia 26 November 2008
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A Question
If someone called you tomorrow and asked why they
should invest in your business,
what would you tell them?
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A New Reality?
How much do you trust each of the following
institutions to do what is right?
?
?
?
?
Source Edelman Trust Barometer 2008
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Trust in Institutions by Stakeholder
How much do you trust each of the following
institutions to do what is right?
Source Edelman Asia Pacific Stakeholder Study
2006
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Trust in Spokespeople
How trustworthy and believable do you feel each
person is when passing information along about a
corporation?
(Percentage equals top three box score for each
spokesperson)
Source Edelman Asia Pacific Stakeholder Study
2007
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Credibility of Sources
In general, how credible do you feel each of the
following sources is for information about a
company? From which of the following sources do
you get information about companies on a regular
basis?
Usage
Mainstream Corporate Social
Credibility
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The Four Drivers of Business Trust Globally
When you think of individual companies that you
trust, how important are each of the following
factors to building your trust in that company?
Customer
Corporate Reputation
Leadership
Local Familiarity
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Trust is Your Business
Negative
Positive
85
78
56
83
50
44
34
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Implications

• You should expect to have to work harder to win
  the trust of your investors in 2009
• You will need to win the trust of equity
  investors because your access to bank funding
  will be restricted
• You should expect a lot of opposition from
  credible voices that are not close to your
  business
• The media environment will not be friendly toward
  business for some time

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Standout Characteristics (Regional)
What is the first thing you notice that makes
companies stand out from the rest?
Source Edelman Asia Pacific Stakeholder Study
2007
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Good and Responsible (Regional)
How important are the following characteristics
for good and responsible corporations?
Source Edelman Asia Pacific Stakeholder Study
2007
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IR vs PR

• Investor Relations

• Public Relations

• What must be said
• Retrospective
• Focus on the numbers
• Narrow, specialized target audience
• Reports to CFO
• Typically defensive

• What should be said
• Contextual
• Focus on the business
• General audience
• Reports to CMO or head of Marketing
• Typically proactive

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Why Investor Relations?
Provide Information?
Build Partnerships?
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The Structural Imperative
Executive Suite
Strategy
Investor Relations
Marketing Communications
Positioning
Compliance
Message
Message
Message
Message
Future Sales
Investment
Engagement
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A New Model?
Human beings have communicated through stories
for thousands of years. We havent changed.
Integrating the IR and PR functions allows the
company to tell a more consistent, more engaging
story to all its stakeholders
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The Story as Context
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Contextual Communications
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Shareholder Mapping
We certainly cant stop people or funds from
investing in the company, nor would we. But we
can decide where to invest management time, and
we wont be spending lots of time and attention
on people we think are going to be in and out of
the stock really quickly.
vs.
Christopher Lafond, CFO Gartner
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Metrics and Evaluation

• Define specific metrics for all financial
  communications
• Link metrics to business direction and goals
• Use metrics to shape and inform investor
  conversations
• Solicit feedback from investors on relevance of
  the metrics

Executive Spokes-persons

• Report chosen metrics on a regular basis
• Ensure that written communications refer to
  selected metrics
• Use metrics as base for analyst relations
  outreach
• Track metrics against business goals

IR Teams

• Understand financial and business metrics
• Tie communications evaluation to financial
  metrics
• Use business metrics in executive quotes and
  other outreach
• Communicate importance of metrics to business
  media

PR Teams
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Digital Content
Real time communication
Engagement over education
Rumor disguised as fact
Expectation of transparency
More informed audiences
Wider communication context
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Implementation
Corporate story alignment
Timely co-ordination of IR and PR teams
Synchronized release of information
Target investor identification
Multi-channel outreach
Ownership of key investor relationships
Core reporting metrics
Big picture conversations
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Managed Conversations
Review of strategic direction Review of key
metrics Review of the period Areas to
address Future plans and objectives What to expect
Why should I invest in your company? What
assurances can you offer me? Where are you going
to be in 10 years? How are you putting my
investment to work?
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The PR Imperative

• Learn the language
• You have to earn your seat at the table
• Be prepared to show value
• Measure and evaluate your activities properly
• Reach out
• Develop a business case for integration and
  defend it
• Adapt your approach
• Use the traditional tools of PR in an IR context

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The Last Word (s)
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Questions?
steve.bowen_at_indopacedelman.com