A powerful IR program is critical for any company aiming for growth and success. It is also vital for targeting and building relationships with investors that are more likely to back the company. An effective Investor Relations program provides current and potential shareholders and investors with the information they need to make informed investment decisions. A well-executed and thoughtful IR program can help raise the company profile and enhance credibility with the Capital Market Authority.
Here are 4 things you need to consider for an effective Investor Relations program that will help achieve your company goals.
Digital Strategies for Investor Engagement
IROs must use the right strategies and associated tools to achieve the desired engagement outcome. Start viewing digital communications platforms as another tool, not a replacement for many of the traditional ways to communicate with investors. We recommend using digital platforms to deliver content in a visual form; even if institutional investors are looking through an annual report, or an earnings release and garner information that way, they are going to learn visually as well. In today’s market, proactive engagement helps IR teams to understand who their shareholders are in the present moment and who they want them to be going forward.
Quarterly Earnings Calls
Earnings calls allow companies to be proactive, more engaged and transparent with their audiences. Many companies provide a phone recording or presentation of the earnings call on their corporate websites for a number of weeks after the actual call, making it possible for investors who could not log in to the call to access this information.
What is released during the earnings call can help analysts in their fundamental analysis of the company. With earnings calls, investors quickly receive the information they want without having to scour through dozens of report pages to find it. Once a company hosts an earnings call, it must continue to keep the investment community engaged. This means that it must continue these calls to prevent investors from thinking something is amiss.
We recommend keeping in mind the following things when conducting an earnings call:
- Retell your company’s story;
- Introduce your CEO and CFO;
- Be transparent;
- Use the time wisely;
- Keep the management team aligned;
- Hold a live Q&A.
- Choose carefully the metrics & data that will be shared.
The investor website is the largest channel to tell your story, facilitate engagement and encourage confidence by providing timely, accurate, and helpful information. A company’s investor relations website is the go-to platform for most investors and should be used to encourage engagement between the company and market participants. The investor relations website must fulfil its documentation requirements to provide documents that are easily accessible, such as quarterly earnings reports, to investors that are a matter of public record. Staying on top of what works and what doesn’t with regular in-depth reports and feedback will ensure a positive return on investment.
Enabling investors to easily connect with the company is an essential feature you don’t want to overlook. Including a section for investor resource materials and contact information, such as FAQs, email alerts, subscribe/unsubscribe, and the ability to request a meeting will make it easy for investors to stay informed and engage.
Today’s investors rely on your IR site to get a real sense of who you are, what sets you apart, and why they should invest in your company. From your value proposition to financial metrics, investors need quick and easy access to highly digestible content, all adapted by a fully seamless experience across devices.
Tracking Performance & Effectiveness
Measurement and evaluation is one way for IR teams to demonstrate that they are a positive contributor to the company’s performance and that they can be held accountable like other business units/departments. As there is no perfect way of measuring the investor relations performance, each IR function should determine its performance metrics according to its IR strategy and its goals.
Investor Relations contribute to the company; hence it is an investment, not an expense. IRO performance and efficiency should be determined objectively and monitored regularly. While the share price is the most known metric, this may not be your best choice to measure. If you are worried about your financial image and need to know where you stand, start with a perception study, it will be quite comprehensible.
As you strategically plan your IR activities and goals for 2022, make sure to apply a complex approach. A good place to begin is an honest assessment of your previous IR plan. What panned out as planned? Did you achieve your proposed goals? Did you meet or exceed what you told the Capital Market?
Another thing to consider is the accessibility of the senior management, which is the key to a successful investor relations program and it is important to identify from an early stage how much time members of the senior management team will be prepared to commit to activities in this field. To craft a powerful Investor Relations program the IR department must set clear objectives. These objectives shall include:
- Educating investors about company strategy;
- Restructuring the shareholder base;
- Upgrading investor relations collateral to industry best practices;
- Informing senior management about market perceptions;
- Assessing current internal & external resources.
Whether you’re developing your first IR program or restructuring a longstanding one, our IR experts can guide you in building a powerful strategy for engaging investors and analysts. We can help you with maintaining a loyal shareholder base, enhancing long-term shareholder value, and building long-term credibility with the investment community.