The investor relations team direct interactions with boards of directors are limited, but IR is a strong resource for the board in many situations. An integrated IR strategy with “boots on the ground” accumulates a wide variety of data from investors, sell-side analysts, bankers, lawyers, accountants, stock exchanges, corporate communications providers, and healthcare industry and professionals. Depending on the stage of your company – pre or post IPO – relevant information varies greatly, but an IR firm dedicated to your sector can provide a wealth of information. Here are five ways IR can assist the board.
- IR Teams Inform Better Decisions
As boards of directors seek to protect shareholder assets and maximize shareholder value, they are required to be experts on the environment in which their company operates. These company specific markets are nuanced, and the ability to synthesize information from multiple sources helps paint a clear picture of how a company is currently positioned and performing relative to peers, and how it should set strategic initiatives. In order to provide the best possible advisory and oversight on corporate actions, information from the company’s investor relations team will help inform better decisions.
- IR Teams Can Help Navigate Bank Relationships
If the company is on the path to an IPO, they must prepare to select a deal team that includes a banking syndicate, lawyers and accountants, while simultaneously preparing internally to be scrutinized by this group and ultimately investors. An IR firm will have experience working with the group of banks active in the sector. This ranges from bankers who have been recently successful bookrunners or co-managers and how they interact to the research analysts and equity capital markets teams who will work to continually support your stock as a public company.
- IR Teams Know Your Competition
Once an IPO is set into motion and S-1 writing begins, it is time to position a company with an investor audience in mind. Boards will advise and oversee thoughts on positioning and ultimately have a large say in this discussion. At this stage, an understanding of the competitive landscape and peer group is critical because precedent reporting metrics and guidance will influence how external participants will recommend framing the company. IR firms can help boards dial in their story by understanding the spectrum of possibilities, what’s worked and what hasn’t.
- IR Teams Help You Establish a Plan
After an IPO, companies are evaluated differently, so board objectives must also change. With the increased visibility that comes along with being a public company and a new group of stakeholders to manage in public shareholders, management teams have an additional responsibility. An annual IR calendar composed of investor conferences and NDRs, including current shareholder interactions and shareholder targeting, can efficiently address this responsibility. Management teams can rely on IR partners to plan, communicate the plan, execute the plan, and report back to the board.
- IR Teams Can Provide Helpful Feedback
Another way IR partners can help management effectively communicate with their boards is through preparing industry surveillance reports and tracking performance compared to peers. When boards are more interested in understanding Wall Street’s perception of a company, perception audits can be conducted to paint a full picture of the external view. This is helpful feedback in efforts to gauge which elements of messaging are resonating with or missing the target audience.
Overall, effective and successful IR programs assist with internal and external communications, and they function as the conduit to complete the feedback loop. Boards who successfully leverage this resource will find discussions with management teams more productive. If you’re looking for an IR team to support you, contact Gilmartin today.
Philip Taylor, Associate