Not too long ago, I was asked to benchmark investor relations practices.  The goal of the project was to gain insights into the investor communication process, the value of  targeting strategies and evaluate the degree of C-suite involvement in IR.  This benchmarking process recalled an old graphic – pasted below – which I’ve used to explain what IR does.

IR educates, informs and influences perceptions of a company’s
growth strategies, operations and results, to achieve fair valuation
IR TempleThis involves executing strategies related to:

  • Communicate – Shaping investor perceptions by integrating financial reporting with strategic messages that put key metrics affecting valuation in context
  • Target/Engage – Leveraging knowledge of financial markets and investor behaviors and styles to develop relationships with targeted analysts, investors and other influencers 
  • Measure – Monitoring perceptions, earnings estimates, competitive landscape and trading environment to inform approach

And is built on a foundation of:

  • People & Resources – Cultivating team bench strength; building and sustaining collaborative relationships with internal and external resources
  • Compliance – Understanding and ensuring relevant regulatory, disclosure and reporting requirements are satisfied

After reviewing these foundational ideas, the discussion turned to questions like:

  • How much time should the CEO and CFO spend with investors and what is the besdt use of that time?
  • How do you prioritize who does what and when?
  • How visible should other members of senior management be in investor interactions?

There’s no one-size-fits-all solution.  Much depends on company size, industry and performance, but a general rule of thumb is CEOs should allocate roughly 15% of their time to engaging with investors; CFOs somewhat more.  This works when things are generally going well for a company and its industry or sector.  However, CEOs/CFOs at small cap companies or those going through challenging or transformational times may need to allocate more time.

As for which investors the C-suite should meet, consideration should be given to current and/or potential ownership, fit (investor style) and sentiment (is investor supportive or critical?).  Regarding venue, calls or meetings at corporate office are efficient uses of CEO/CFO time; one-on-one roadshow meetings are often highly effective while presentations at conferences are good if you need to generate interest with a larger audience or broadly deliver key messages.

Exposing other members of senior management (such as the COO, Division Presidents, etc.) is nearly always good in my view.  First, it exposes them to investor thinking which may help sharpen future strategic decisions.  Second, it can reassure investors that the “right people are on the bus” running the business.  Finally, it provides IR and C-suite some flexibility and optionality when planning for investor interactions.

For me the most valuable part of this process was asking insightful questions. The discussions that ensued helped define key goals and objectives and the means for achieving them.  This is how strong foundations are built.


Lisa Ciota
Lead-IR Advisors, Inc.