7 minutos de lectura 22 oct. 2018
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How to make the most of your Investor Relations function

Por Martin Steinbach


Más de 20 años de experiencia en el ámbito de la financiación empresarial: OPI, M&A, private equity, capital riesgo y financiación mezzanine. Líder de opinión en materia de OPI.

7 minutos de lectura 22 oct. 2018

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Our Investor Relations survey provides global insights into how IR should be organized pre- and post-IPO for successful public companies.

Investment markets can be volatile places. They are where organizations can realize rapid growth and unlock the capital and value they need to build truly extraordinary businesses.

But it’s also in the investment markets that organizations are most exposed to the raw forces of international economic, political and regulatory trends.

Navigating the complex laws and regulations that govern these factors can be hazardous. This is why your Investor Relations (IR) function is so important. To better understand how IR can have the greatest impact, we surveyed 876 IR professionals, across companies of various sizes, and across diverse geographies.

Our Investor Relations Survey is available to download here. 

Making the most of IR

The IR team’s function is to be your interface with the capital markets, investors, shareholders and sector analyst groups. This means it should play a central role in allowing the strategic decision makers in organizations of all sizes to get a thorough understanding of sentiment and trends in the wider investment landscape.

Interdepartmental connectivity is vital to good IR practice


of internal IR teams have regular contact with the accounting and finance department.

Generally, cooperation with almost all departments was rated as very important by the people we surveyed – headed by the accounting and finance department and followed by planning, budgeting and forecasting.

This kind of regular cross-departmental contact allows leadership to develop the understanding they need make critical strategic decisions that can promote the best long-term growth agendas.

For example, an organization preparing to make an initial public offering (IPO) may need sophisticated information multiple factors, from prevailing valuation trends to deciding what market or exchange they should list in, and what governance, political or regulatory issues may need to be taken into account as part of getting IPO ready. IR can help with elements of all of this.

For a company that is already listed, on the other hand, an IR function can help uncover a range of business-critical insights. This can include helping the organization understand the current status of its shares, or inform it of relevant shifts in the regulatory environment.

More specifically, IR teams can provide information on:

  • Market and investor sentiment and feedback
  • Investor movements and activity
  • Most frequently asked questions
  • Information on liquidity of share trading
  • Shareholder activism
  • Shareholder engagement (which includes proxy advisory firms)
  • Recent regulatory changes

Getting IR’s knowledge to the people who need it

IR has a seat at the top table


of companies of all sizes have an IR representative attending board meetings.

At the center of the IR team’s function is a close relationship to the board via regular reporting. This is vital for effective co-ordination of information for financial disclosure and communication in capital markets. But this can vary in several ways.

From our survey, 77% of respondents reported that an IR representative regularly attended board meetings in person. For 22% of those surveyed, this correspondence involved quarterly meetings, and for 8%, it meant bi-weekly meetings.

The top subject for discussion is market sentiment and investor activity, either at the board meeting or in a report – with 83% of respondents indicating they provided written reports for boards to review. For 37% of these respondents, the report was quarterly – although just 3% indicated they issued bi-weekly reports.

The frequency with which an IR function sends either a representative or a report to a board tends to increase with company size – although EY’s survey also found that smaller-cap companies were more likely to send a representative that publish a report. This is unsurprising – reports can be time-consuming and resource-dependent to produce.

Ensuring understanding

IR audit


of companies globally audit their IR function.

With the growing importance of financial communication, IR is also part of internal audits: the larger the company’s market cap, the more likely it is to have an internal audit of the IR function. However, this is still uncommon – with only a third of organizations surveyed auditing their IR functions.

There is also a noticeable disparity between what kinds of issues were discussed by a representative at board meetings and presented in reports. For example, 79% of respondents reported they discussed information around investor activity in reports, but only 62% of respondents said they discussed this topic in meetings. Similarly, 49% of respondents indicated they discussed liquidity of share trading in reports – that figure was just 28% when it came to meetings.

There was also disparity in what respondents in different geographies discussed in IR-board correspondence. For example, IR representatives reported themselves more likely to have board meeting discussions around shareholder activism and engagement issues in the Americas than in other regions. This is possibly an indication of higher levels of shareholder activism in American financial markets.

However, American IRs were also less likely to discuss issues around regional regulatory changes – possibly because issues like this are more likely to be handled by the general counsel or corporate secretary in US and Canadian organizations.

Reports – as with audits – may tend to have more details about what’s going on, but boards still need to understand why changes are happening to make the right strategic calls. Having an IR function will only have an impact if its findings are properly digested, discussed, and understood.

Maximizing the strategic value of your IR function

IR strategy


of companies globally have a written IR strategy.

For companies considering an IPO – and those that have already gone public – a clear IR strategy will give your organization a solid basis for long-term success. Yet only half of companies globally have documented their IR strategy.

This kind of written IR manual would mainly cover internal processes, disclosure policies, and the corporate calendar. It can become a key tool for allowing strategic stakeholders to get a clearer view of dominant trends and behaviors in the investor landscape.

A clearly-documented IR strategy can also act as a solid foundation for maximizing the potential strategic benefits of the ongoing IR-board partnership.

This is a key challenge for IR professionals – of those we surveyed, 33% indicated they’d like to receive more direction from the board on insight into the company strategy, and 20% felt that the board could give more guidance around IR goals. But they also felt they had the potential to help the board far more – with 44% believing the board would appreciate more investor feedback, and 18% saying IR should provide the board with more insight into wider market sentiment.

Although IR is not the decision-maker on strategy, M&A, messaging or responding to street feedback, it does provide the C-suite with the required information, candid feedback from the shareholders’ point of view and suggestions on overall strategy.

While the IR function’s primary role may be to communicate with investors outside the organization, transforming this from a one-way conversation to a dialogue is where its true strategic value could lie.

Investor feedback is valuable information for the board and can give an insight into the way a company is perceived in the market. By feeding through details about investor concerns, IR teams can help boards get a better sense of how their strategy is landing – enabling course-correction to ensure long-term success as well as keeping investors happy in the short-term. With uncertainty still a key challenge facing organizations worldwide in this transformative age, that could prove of significant value.

Guide to Going Public

Strategic considerations before, during and post-IPO

Read more

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Our survey of Investor Relations professionals identifies ways they can deliver far more business value than simply keeping investors happy.

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Por Martin Steinbach


Más de 20 años de experiencia en el ámbito de la financiación empresarial: OPI, M&A, private equity, capital riesgo y financiación mezzanine. Líder de opinión en materia de OPI.