As GM revels in its successful IPO and Ireland tries to climb out of its financial crisis, there’s no shortage of dramatic financial news these days. Which, of course, keeps the investor relations professional busy. Yet as corporate reputation and public trust issues grow, and social media and digital PR continues their march, there’s something afoot in IR that all communicators must take note of—integration.
“There’s a certain convergence of all fields of PR into one communications discipline,” says Stephen Allan, VP of marketing and communications Unilife Medical Solutions, based in Lewisberry, Pa. “There’s really no such thing as PR and IR anymore, it’s really just communications.” David Calusdian, EVP and partner at investor relations agency Sharon Merrill Associates, agrees. “The audiences are not completely separated anymore.”
Which means, naturally, that PR and IR need to be in lock-step with each other on a daily basis. Kind of a no-brainer, right? Yet Claire Koeneman, global leader of the corporate communications practice at MWW Group and president of the Financial Relations Board, says that the relationship is not so cut-and-dried.
BUSINESS SIDE
“If you’re a public company, the functions of corporate and financial communications should work hand-in-hand,” says Koeneman. But there are nuances: Corporate communications does very critical messaging around the business through thought leadership efforts with the CEO. “But the CEO is a financial brand as well, and they can’t talk about material news that would move the stock price,” she says.
Yet the business side must be woven into your organization’s financial story. “For the last couple of years, it’s all been about financials as companies are challenged to survive,” says Koeneman. “Yet there is only so much you can talk about your balance sheet. And as we begin to come out of this environment, there has to be a business story behind it.”
INVESTOR’S INTERESTS
But what are the advantages of this convergence of messaging? Koeneman says that corporate communications’ focus on varied stakeholders, such as employees internally and business partners externally, is all relevant information for investors. “They need to know about how a company is engaging with employees and how it treats partners,” says Koeneman.
While the stock price and quarterly earnings still resonate with investors, corporate social responsibility does too, contents Koeneman. “The whole idea of social responsibility funds is growing,” she says. “So we’re focusing on CSR for our clients. Koeneman adds that “it’s a dream for corporate communications and IR to put together a social responsibility story.
FUNCTIONAL INTEGRATION
And putting communications together—through all PR and IR functions—is a priority for Allan. “The way I try to manage for our company is to have communications with customers, investors, government agencies, political leaders, community groups and the public under one house—streamlined and consistent,” says Allan. Key business messages need to remain constant across all groups, he continues. It’s just the refinement of those messages to suit the needs of the group that requires some subtlety. And openness counts. “The more concise information you can provide stakeholders such as investors, the better understanding they’ll have of your business,” says Allen.
DAY-TO-DAY INTERACTION
It’s critical says Calusdian, that messages aren’t mixed, which requires interaction between communications and IR on a regular, daily basis.
For eample, if PR is putting out a press release on a new contract, it should involve IR. “IR can provide the context and insight as to how investors might react to that news,” says Calusdian.
In another, broader scenario, say the IR function sets a strategy to communicate cost-cutting measures, including workforce reduction. “Having PR put out a press release on the hiring of a new VP at the same time might be problematic,” says Calusdian.
To avoid such blips, Calusdian recommends the following steps for communicators:
• Set up a regular meeting schedule with IR.
• Understand what IR’s long-term strategic goals are, and what their messaging is.
• Be aware of IR regulations. “Regulation FD (Fair Disclosure) is something every PR person should know about,” says Calusdian.
In key situations, such as earnings calls, investor days and of course, in crisis situation, Calusdian strongly recommends sharing information between the IR and PR functions, “so that no audience is left with misperceptions.”
According to Calusdian, IR and PR can convergence in other ways, including events.
“If PR is doing a media tour, they may not think to integrate IR into the events, but if there are open time slots, companies often combine the two,” he says.
SOCIAL MEDIA WAVE
The weaving of social media into financial communications is having a big effect on its convergence with PR (see sidebar for social media tips).
Yet with social media, says Koeneman, it’s more about control than convergence. “Employees must be cautioned that they can’t talk about a deal or a lost distribution channel on Facebook,” she says. That’s why social media policies are critical.
Allan, though, is keen to explore audio and video channels through social media. “One area that we’ll be investing in is communicating with video streaming—short snappy clips that showcase various parts of our business,” he say. “That’s the wave of the future—you must have a 3-D view.”
Allan’s advice for maximum PR-IR integration? “You need to start from the ground up,” he says. “Have intimate understanding of how products, production systems, partners and your people all resonate with all the stakeholders, including investors.”
That’s one investment tip that just could pay off. PRN
CONTACT:
Stephen Allan, [email protected]; David Calusdian, [email protected]; Claire Koeneman, [email protected].
Don’t Let Social Media Trip Up Financial Communications
There are many things to consider for integrating blogs and other social networks into an IR program—such as disclosure and adhering to legal compliance, according to Claire Koeneman, global leader of the corporate communications practice at MWW Group and president of the Financial Relations Board.
This is quite a dilemma, as the adoption of social media has exploded and continues to be a medium of choice for millions of individuals hungry for instant information. Here is some advice from Koeneman on how to handle social media, particularly within a public company:
• Use social media as a complement to what is already being done in IR not as a replacement
• Adopt social media networks and channels used by key stakeholders
• Monitor social media—shares can be impacted by third-party posts and rumors
• Pay attention to feedback received
• Make sure your IR Web site is up to date and reflects industry best practices
• Institute a social media policy