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BEING PROACTIVE: Moving from Good to Great IR
It doesn’t take a crystal ball to realize that these are no ordinary times. Unprecedented uncertainty sparked by unprecedented events have rocked the equity markets and raised the persistent specter of recession. With the road ahead communication rarely has been so daunting. Investment insight, provided assertively, is at a premium.
For years, Rivel studies have showcased the value of “superb” IR. For more than ten years running, institutional investors have assigned a 10% valuation premium to companies with outstanding investor communications (while discounting those with “poor” IR by as much as 20%). But what does superb IR actually mean in times as extraordinary as today? How can companies seize that prized valuation dividend? It goes well beyond being prompt and responsive to investor inquiries. It starts with proactivity.
“[It] starts with investor relations reaching out and being very proactive. Before the quarter, asking, ‘What are topics you think are going to be of interest to the investment community?’ and taking that into consideration in what executives address during [their outreach]. The follow- up [involves] reviewing models based on feedback and ... being proactive in making sure that we see any media coverage that senior management is having.”
Sell-side analyst Seizing the Reins
Analysts and investors look to IROs to lead the in a recent survey that proactive IRO outreach is essential in dealing with today’s ambiguities.
78%
of investors say proactive outreach is essential
to come to them with questions—getting out in front of relevant news, whether it’s good, bad or business as usual, allows IROs to control the narrative and burnish a reputation for stable, consistent messaging.
wisdom. Becoming a company expert and strategic partner is imperative. While access to senior management is always welcome, the IRO should be able to respond to inquiries in their stead at a comparable level of expertise when it comes to long-term strategy, industry developments and depth of knowledge about from being embedded with company leadership at its highest levels. There is a widespread and growing expectation that the IRO will be at the table when important decisions are made—an investor conviction that IROs must strive to have senior management realize and indulge.
rivel.com
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