Recruitment specialist Fred Clayton offers advice on researching your would-be employer
If you find yourself being courted by first-rate companies, remember: it’s not all about them!
You may find the company and opportunity incredibly attractive and its interest in you quite flattering but, before you leap, take a deep breath and look beyond the research you have already done to gauge your compatibility with management’s communications philosophy and style. Your long-term success and happiness there could depend on it.
By interviewing with the company’s top management to understand the challenges, responsibilities, potential for advancement and other important information ‒ not to mention reviewing public filings, accessing recently recorded earnings calls and investor presentations and reading analyst reports ‒ you will glean vital information about the company, its financial performance, its management and what investors and analysts are thinking.
Good ‘chemistry’ with the executives you meet in the interview process is also essential ‒ but chemistry alone does not guarantee compatibility with their values and operating philosophies.
Dig deeper to understand what makes management tick. Here are a few tips:
1. Investigate how the CEO has communicated with the public through general media, not just with the investor and analyst communities through the financial press and at conferences. Is she/he a proactive and open communicator or a reactive and minimalist communicator when it comes to disclosing important information to stakeholders?
For example, how the CEO and other C-level executives have handled product or services-related crisis communications may provide important insight into how they would handle an investor relations crisis or even routine communications with investors and analysts.
2. When accessing finance-related recordings of the CEO and CFO in earnings calls and investor presentations, beyond listening for content and ‘likability’, assess their engagement and tone. Do they only adhere to the script or are they conversational, willing to add color for deeper understanding? Do they patiently field questions, no matter how fundamental?
3. If not on the interview schedule, ask to spend time with the company’s head of corporate communications to learn how she/he works with executive management and IR. The company’s overall philosophy on external and internal communications will inform your thoughts on how the firm approaches investor relations.
4. Research the history of investor relations at the company, particularly under current management. Past behavior is the best predictor of the future, so if management set high standards and fully engaged with its past IROs, it is likely you would experience the same.
But if previous IROs have had a limited or low profile in the company, or if there has been a string of IR officers in recent years, no matter what the reasons given by the company, you should investigate.
5. Speak to outsiders if the position is currently vacant. In addition to contacting knowledgeable sell-side analysts, reach out to the former IRO, and perhaps the one before her/him, to learn what you can about the subtleties of inner workings there.
Does management commit ample time to meet with investors at the company’s offices or participate in investment conferences and non-deal roadshows? How is the IRO engaged in these activities? Of course, these people may be guarded or have their own agenda, so listen intently – much can also be learned from what is not said.
6. If the position is currently occupied and the incumbent is not aware the company is confidentially searching for a replacement, your tactics for developing additional insight are limited. The fact that the incumbent is not aware of the impending change could be telling, however.
Whatever management’s philosophy and style of communicating with investors and the investment community, you may be comfortable supporting it ‒ but wouldn’t you rather know before you take the job?
Fred Clayton is CEO at Berkhemer Clayton, the LA-based executive search firm. He also sits on the board of NIRI’s Los Angeles chapter.
