Improve Investor Relations With 5 Simple Changes
By Gianluca Bisceglie
Investor relations (IR) departments are coming under more pressure than ever before. Demands from stakeholders are high, with investors more inclined to take action, and regulators paying much closer attention to how companies manage shareholder capital.
When it comes to growth, investor relations can play a crucial role in the long-term health and prospects of any company. Investors want access to more information. Hence the value of a well-crafted, informative and in-depth investor relations section within a website, or even a specifically targeted landing page.
Whether you are a VC-funded startup, SMB or publicly traded company, how well you look after investors can make a huge difference to the company’s financial stability and how it is perceived. When competition for investment funding is growing ever more diverse, be it from established businesses maintaining global growth, to disruptive new entrants looking at mature markets, IR has never been more relevant.
Proactive investor relationships make life easier for everyone. If something is wrong, such as a missed quarterly target, the impact on key stakeholder relationships is going to be maintained more effectively. Yet improving IR needn’t be complicated, here’s how you can do it with five simple changes:
#1: Publish transcripts of earnings calls and broker conferences
Earnings calls provide vital context to financial results.
Most IR websites offer audio replays and PDFs of slide decks, but not many publish transcripts. Instead of making investors seek out poor quality unofficial recordings, get the information transcribed and published so that it can be easily found, downloaded and read when investors have the time.
Other companies already doing this include; Dell Technologies, FedEx, Ford, GE, HP, Johnson Matthey, Nike, Rolls-Royce, Sprint, and Stanley Black & Decker, amongst others.
Unlike annual report letters – an equally valuable tool – investors can get questions answered during an earnings call and broker conferences. With this information, which would incorporate the context surrounding decisions and results, investors can make more informed decisions. Getting these calls transcribed is one great way to keep investors happy.
P&L and balance sheets aren’t all investors are interested in anymore. Capital allocation, cashflow and corporate social responsibility (CSR) activities often fall within the scope of what modern investors want to know about. All of this makes your IR website more important than ever, with it necessary to maintain a proactive relationship with investors throughout the year.
#2: Make your CEO and annual report letter more prominent
Companies work long and hard over annual report letters. Only for this to be buried within a PDF. Instead, make it easy to find and it will be more likely to get read. GE, Eaton, Charles Schwab are already doing this on their IR websites.
Investors want to know more about your CEO. Make them more prominent. Not just with the letter on the home page. Let investors get a better sense of who they are, with videos. You could do this with quarterly or annual updates, TV interviews, or an introductory informational interview about their work as CEO. Either way, you are controlling the narrative and strengthening investor relations.
#3: Engage in active dialogues with investors
Unless you talk to investors, you can’t be sure that how they see the company and how the information you are presenting is aligned to that view. Complacency and assumptions are the enemies of progress when it comes to investor relations.
Investors, even those with considerable sums at their disposal, are aware they don’t know as much about a company as management and board teams; however, they may have a perfectly understandable reason for having a certain point of view. Talk to them. Disclose what you can within Regulatory guidelines, explain why something happened, and the action being taken to resolve a problem.
Speaking to investors sooner rather than later is crucial. Help them see the view of the board and management. Whenever possible, get them onside and take a proactive approach.
#4: Make financial presentations interactive
Behind every financial presentation and earnings report is months of work. And a considerable amount of context. Give investors the information they need – what you can and should disclose – with more detail behind presentations. Context is everything.
With tools such as Visyond, you can share interactive financial presentations – spreadsheets and graphs – with easy-to-digest interactive sections. Secure cloud-based tools mean you can selectively share some details – within Regulatory guidelines – with brokers and institutional investors. Explain the detail behind the numbers – show, don’t tell, and use this to demonstrate that you want to proactively engage in dialogues with investors.
#5: Use social media
Social media now plays a key role in how institutional investors communicate with the world. According to a Greenwich Associates report, 80% of institutional investors have integrated social media into communication and marketing strategies. Providing you link to, or mention Regulatory capital at risk guidelines, you can use Twitter, LinkedIn and other channels as part of earnings calls and other announcements.
Social media, as we see with the likes of Elon Musk, can make a CEO more human. Giving them and the company a chance to interact with investors in new ways, so long as this is carefully managed and in-line with public and shareholder statements. Now is the time, when investors are more active than ever, to engage with them and communicate more often.
Gianluca Bisceglie is the founder and CEO of Visyond, a cloud-based spreadsheet software platform that enhances the way people work with spreadsheets – allowing secure, selective and interactive data sharing, minimising errors, and performing analyses in seconds with a few simple clicks. www.visyond.com