Is the IR/PR convergence being bandied among corporate bosses a bunch of baloney?
Although a growing number of managers say it's important to merge the two functions - mainly due to increased government regulation for publicly traded companies, a la
Sarbanes-Oxley and Reg FD, but also because IR execs realize shareholders and investors no longer rely solely on financials but also on a company's overall reputation - less than
a quarter of PR pros meet with their IR counterparts on a weekly basis, according to a recent "Silo Buster" survey sponsored by PR News and the Public Relations Society
of America (PRSA).
The survey, which was distributed online in August to PR News subscribers and PRSA constituents (20,000-plus) found that among companies with an IR function, PR pros
meet with their IR counterparts mostly on an as-needed basis as opposed to working in tandem (see survey results on page 7).
"In terms of formalizing [IR/PR] relationships, they have not played out as people seem to think," says Laurel O'Brien, chair of the PRSA's Financial Communications Section
and VP/head of corporate communications at Delaware Investments (Philadelphia). "But philosophically, convergence is real. PR and IR executives are working more closely
together and sharing more information and research."
Nearly 72% of respondents say Sarbanes-Oxley and Reg FD have had "no effect" on the relationship. Perhaps. But anecdotal evidence garnered by this reporter suggests
otherwise.
Although just a little more than a third of respondents' CEOs are pushing IR/PR execs to work more effectively together, O'Brien says the onus falls on IR and PR pros to
"pool the pieces of the puzzle together to tell a complete story of the company."
She adds: "If anything, it's the PR folks who have to step up to the plate and be more conversant in financials. Being able to speak [managers'] language gives PR pros an
edge and enables them to be seen as more of a contributor."
Contact: Laurel O'Brien, 215.255.1520, [email protected]
1. Does your company have an IR function?
Yes: 49.8%
No: 50.2%
2. If so, how often do you meet with IR?
Weekly: 21.8%
Monthly: 3.2%
On a per-need basis: 75%
3. If not, does your company use an outside agency for IR?
Yes: 7.4%
No: 92.6%
4. To what degree do you think there is an inherent turf battle between IR/PR?
High degree: 5.5%
Moderate degree: 24.8%
No problem: 69.7%
Sample Responses:
- We are a financial company, so IR and PR battle frequently.
- Though the areas are separate in my company, we often reach the same audiences with different messages.
- No turf battle - areas are separate in my company, messages are appropriate to various audiences.
5. What can be done to alleviate the problem?
Highly define each role and respect each other's territory 60.3%
Meet weekly/Invite CEO to meetings: 15.5%
Other (see sample responses) : 24.1%
Sample Responses:
- Integrate the functions/departments.
- Education and dialogue.
- Listen to and respect each other's position.
- Share close proximity in space, even though functions are often separate.
- IR should report to PR & Finance.
6. How has Sarbanes-Oxley/Reg FD impacted the IR/PR relationship in your company?
Improved the relationship: 19.3%
Hurt the relationship: 8.1%
No effect on the relationship: 72.7%
7. What is the level of CEO commitment to making IR/PR work more effectively together?
High: 36.7%
Moderate: 34%
Low: 29.3%
8. What are some of the best practices to improving communications between IR/PR?
- We recently worked together to design separate (but equal) IR and "Newsroom" pages on the company Web site. Doing that allowed us to better understand each other's goals
and job descriptions. The bottom line is that we're on the same path - help the company succeed and deliver key messages successfully. If we work together, we should only make
each other's jobs easier. - Have IR people stay out of issues that don't pertain to them and only pertain to PR. Also, elevate the role of PR in the eyes of the executive team and educate them on the
importance of PR. IR has an advantage because they have more time with the CEO and other executives because they work with financial issues; they exploit this advantage whenever
possible. - IR helps shape the messages, but PR has the final say in which words are used. IR understands the nuances of the financial results, but PR people are the professional
communicators. Both the CFO and the head of PR report to the CEO at our company, and that certainly makes things easier, because the two leaders are peers. - Ongoing communication, plain and simple. It also helps to know when our CEO attends financial meetings in other cities so as to try and arrange press meetings/dinners.
- Constant contact between the top IR and PR practitioners. No surprises.