Managing up: C-suite relationship advice for IROs
Whether IROs report into the C-suite or not, there’s no doubt that maximizing the effectiveness of this vital internal relationship benefits both the IR team and the company as a whole. Emma Burdett, partner - capital markets at Maitland, and Brian Rafferty, CEO at Taylor Rafferty, share their expertise.
Why is developing and/or maintaining an effective relationship with senior management so important for IROs?
Emma Burdett: An IRO’s role is integral to the way a company represents itself to, and learns from, all stakeholders – both externally and internally. An effective relationship is therefore essential for the IRO to learn and be fully up to speed with strategy and growth plans so that these can be appropriately represented externally. The relationship is also important when it comes to IROs effectively interpreting and reporting external feedback back to the board.
Brian Rafferty: The IRO must demonstrate to the market their resonance with the C-suite’s approach and ways of thinking. The IRO’s role and ultimate success depends on having trusting relationships with management and shareholders alike.
What are the main benefits of a C-suite that’s connected with the IR team?
BR: Understanding and appreciating the wide variety of skills an IRO must apply, and the dramatic swings in types of initiatives the IRO manages, helps the C-suite effectively collaborate and support proper resourcing.
EB: Benefits include a management team that is taking seriously its responsibility to its owners and shareholders, a company that is representing itself effectively and appropriately to its external audiences, and a company that is listening to feedback and responding as necessary and understanding where it sits in the context of its environment and peers.
How can IROs ensure the C-suite is engaged with the IR program?
EB: Make them see the benefits! Managing the expectations of the financial audience is the best way to gain credibility and improve reputation while growing understanding of what your company is seeking to achieve. The upside from a well-managed IR program – developing and effectively presenting a strong equity growth story, engaging with existing investors and finding new investors from a well-planned targeting exercise – will lead to enhanced reputation and valuation. If the C-suite see this, they will want to participate.
BR: The economic and strategic value of IR should be highlighted, and progress towards goals measured. When the C-suite appreciates the returns from proper investment in IR, they become intensively engaged.
What is the best way for IROs to make sure they’re aligned with the C-suite in terms of messaging?
BR: IROs should apply the same principles that drive effective external messaging: consistency, discipline and communicating in the context of an investment narrative and value-building strategic plan.
EB: IROs should try to position themselves on the executive board or, at the very least, try to ensure they are included in the information flow and are part of the company’s messaging creation.
What would be your one top tip for IROs seeking to enhance their relationships with the C-suite?
EB: Deliver great advice and manage an effective IR program. Be on top of your brief - organized, calm and efficient.
BR: Set goals that resonate with the C-suite. Never be afraid to push back and/or inject new approaches and initiatives, and keep them engaged in progress as well as set-backs.
Any other points you feel are important?
BR: The IRO sits in a unique position to add value and protect the C-suite’s interests in the capital markets. It is the IRO’s decision to seize the position’s opportunities or to retreat into a role that is driven by process, repetition and ticking the boxes.
If you have the drive to try to make the IR program a strategic asset, and the C-suite doesn’t support this approach, move on...There are a great number of management teams that are looking for an IRO with the will to lead.
EB: The chair leads the board. If the chair supports and understands the value of IR, then the IRO has the best chance of success. Never join a company where the board dismiss IR as unimportant – you will be pushing water uphill.