Financial Communications for the New Year
With another year in the books and everything to look forward to in 2014, I've been reflecting on some of the discussions I had with my colleagues in the Boston chapter of the National Investor Relations Institute (NIRI). I’m fortunate to have been able to engage in some great debates with some of the best minds and thought leaders in the area that understand both the IR and PR function. Given how those conversations went, I'm looking forward to them continuing into 2014.
The Separation of Public and Investor Relations
I'm looking at an article for which I was interviewed in 2008, and said, "I don't think there's enough communication between PR and IR..." It's more than five years later, and I still feel the same way. In many companies, these two functions still remain so separate -- they might talk schedules and logistics, but that's not the level of collaboration I think is necessary. On top of that, I’m struck by the number of people in both professions that don’t see the value in gaining a high level understanding of the complementary function, particularly given how similar the two are by their very nature. Both act as translators, though one communicates the happenings of a company via its executives to the media, influencers and general public and the other communicates the story to investors. And both need to communicate a complete story. That is, investor communication needs to go beyond numbers to include communicating the strength of the brand, the opportunity for growth as new products are introduced, or any number of other non-financial developments. Likewise, PR needs to be tuned into the financial side of their organization as they wouldn’t want, for instance, a significant positive news event to coincide with a less-than-desirable financial or corporate announcement, only because they failed to understand or be connected to the business in its entirety. The Internet and mobile and social computing have brought a new era of information sharing, making it not only prudent, but necessary for PR people who are not regularly in touch with their IR counterparts, and vice versa, to reach out and collaborate.
Social Media as a PR, not IR, Communications Channel
In this new era of information sharing and community building, no corner of the Internet is shielded from the proliferation and growing use of social media tools and platforms – an area PR professionals see as a land of opportunity and one that many IR professionals still prefer to avoid altogether. Even after the SEC released guidelines for releasing material information via social media, those I have spoken with who are in favor of leveraging social channels for investor communication are in the minority. Looking ahead, my sense is that those comfortable being social will remain social, and those who view social engagement as a risk will keep social confined to communications activities outside of investor relations. My colleague, Don Jennings (@DJenningsPR) blogged about some great thoughts on using social media to bridge the gap between PR and IR after attending a NIRI Boston event aimed at promoting the conversation.
Mobility and the Consumerization of Investor Communications
The rise of digital media has impacted the way people consume information. Just take a look around at the next conference or commute home (on public transportation, that is) where heads are buried in smartphones, tablets and e-readers. And it’s not just people in the technology industry leveraging mobility. Investors, customers, employees – virtually everyone at this point – are consuming information this way. So, what does this mean for communications professionals? We have to tailor information to a mobile environment. Communication needs to be crisp and brief, not laden with complex images; and it must be led with pithy, yet explanatory, headlines for easier access with a single click. While some are making progress in this area, most I’ve spoken with are still focused on making information easily accessible through standard web sites and have yet to focus on the mobile aspect, though I expect this will change in the not-too-distant future.
All in all, I think so many of the conversations that took place among the NIRI Boston members over the past year moved us forward in terms of understanding how changes in communications vehicles, options and strategies will impact the relationship between investor and public relations professionals -- and require even more collaboration.
My final thought? As a finance- and investor-minded PR professional, I seem to be in the minority among my fellow NIRI colleagues. I believe this needs to change. We on the public relations end of the spectrum need to make it a priority to understand the business and terminology of investor relations. By doing so, we can be more effective in our strategic recommendations, foster stronger working relationships with our IR counterparts, and increase our value as a trusted advisor on significant communications challenges and opportunities. How do you get started? Find your local NIRI chapter and go to the next meeting.