WITH Wall Street analysts becoming trading strategists for hedge fund clients, some investor relations position descriptions make IROs look like glorified concierges for short-term traders.
This line from a recent IR appointment notice for an S&P 500 company drives home the point (edits and highlighting added):
"(He) will lead an investor relations team that serves as the primary interface with (company name's) major institutional shareholders and Wall Street analysts." I've doctored the screenshot to remove information that identifies the company and the individual IRO.
That’s the sum total of what this release says the guy does.
Does that sound like a post where you answer the phone and hold the hands of a small group of select individuals whose salaries and job titles suggest they don’t really need hand-holding?
What about the company’s loyal, long-term retail shareholders, employees, retirees, widows and orphans? As a public utility, it has lots of them.
Increasingly, it seems there is little interest from management in having IR departments function as trusted intermediaries between directors and executives on the one hand, and companies’ broader shareholder communities on the other.
The standard comeback from many companies will likely be something like, “We provide a website that offers access to all our disclosures.”
That’s a let-them-eat-cake response. The problem is that most websites and disclosures are impenetrable to the average investor on Main Street.
This matters because those same citizens are increasingly being burdened with making their own investment decisions, a task not being made any easier by current investor communication practices.
Surely there is a role for investor relations professionals to help bridge the communication gap through clear, simpler and easier-to-use corporate disclosures. That would be a meaningful pursuit for the profession, don’t you think?
Or would you rather have IROs play gofer to a bunch of blokes who have no interest in what companies actually do and are just looking for a profitable short-term trade?
{ Imagines protests from the IR community here. }
OK, do both.
Related:
With a sell side like this, who needs enemies?
CEO pay disclosures dense as academic texts
Dominic (bio & disclosures) is IR Web Report‘s founder and an online investor relations consultant. He advises leading public companies and investor relations service providers worldwide on using the web for disclosure, engagement and profile building. You can contact him via the contacts page.
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