IR associations are all riding high on the growing recognition of the discipline around the world
'Niri is a lifeline for the IR profession in the US. It is essential for IR executives to be members in order to keep abreast of new developments in the industry and keep up with their peers,' comments Lou Thompson, president of the organization for the last 15 years.
And Thompson isn't exaggerating. With over 1,300 members and a plethora of seminars, workshops, conferences and informal meetings organized each year on a national and local level, Niri has become recognized as an important player in the US financial community as a whole.
In 1995, for example, Niri played a major role in devising shareholder litigation reform legislation. Last year it commissioned a publication, Standards of Practice on Corporate Disclosure, which has sold more than 10,000 copies so far. 'We're at the forefront of developing standards of practice in investor relations,' Thompson says.
Although growing in size and stature, IR societies and associations in other countries have not created the same niche for themselves in their respective financial communities. Nowhere else has seen the same long-term recognition by senior management or the investment community of the investor relations function. And the resources, approach and focus of the different national societies seem very much to reflect how developed the IR industry as a whole is in the particular country.
Canadian Independence
The Canadian Investor Relations Institute (Ciri) is the closest runner-up to Niri, in terms of its size, level of activity and degree of sophistication. More than that Ciri began life as a chapter of Niri. 'We decided to break away in 1990 because we felt the need for an organization offering a Canadian perspective and addressing Canadian regulatory developments and IR concerns,' explains Ciri's executive director, Joanne Brown. 'Here was the second largest group of IR practitioners in the world without any form of representation.'
Ciri now has 480 members, up from 125 in 1990. Like Niri, Ciri has taken a high-profile role in the financial community as a whole, working with a special committee set up by the Toronto Stock Exchange to examine disclosure issues, for example. Ciri's structure is also similar to Niri's. It is organized into local chapters which hold their own monthly meetings, while it runs seminars, workshops and an annual conference on a national level.
'The most important aspect of membership to the organization is the advisory network it provides,' Brown says. 'Any member can pick up the telephone at any time and speak to 479 other people involved in the same world and dealing with the same issues. That's what IR is all about: asking questions, sharing ideas and interacting.'
Northern Networking
Although the size of her network is nowhere near on the same scale, Inga Larsson, IR officer at Ericsson, agrees that the key value of belonging to the national IR society, the Swedish Investor Relations Association (Sira), is the networking opportunity it provides. 'IR is not as highly developed in Sweden as in the US or UK so companies usually only have one person dealing with IR issues. Sira provides me with colleagues with whom I can discuss my concerns,' Larsson says. 'If Ericsson wants to do a conference call, for example, I have about five people I can contact to discuss how they would go about it. Sira offers me the support that I dearly need.'
Although Larsson wishes Sira had more resources, she says its small size - 25-30 members - sometimes works in its favor. 'We're so small that our meetings consist of very open, informal discussions over lunch. It's extremely democratic and everyone gets a say in the speakers who come to talk to us and the themes we discuss.'
Max Gurtner, IRO for Roche Holdings and ex-president of the Swiss Investor Relations Society (Sirv), agrees that size isn't everything. Indeed, although Sirv only has 30 members, they represent more than 80 percent of Switzerland's overall stock market capitalization. 'Creating large organizations can be counterproductive because they are often very bureaucratic which makes it difficult to achieve anything of real substance,' Gurtner comments.
Sirv holds three events a year, each hosted by a different member company, and the speakers and topics are chosen by a small board. Like many other European investor relations societies, such as the French Cliff and Italian Air, Sirv has a strict membership policy: only corporates are allowed to join. 'The idea of the society is to provide a platform for investor relations professionals to exchange experiences,' Gurtner explains. 'In order to create a secure environment where people can be as open and frank as they want, we feel it's best not to include consultants or service providers.'
In this way Sirv avoids what Gurtner sees as the IIRF's main weakness. 'Their conferences are an El Dorado for consultants,' he complains. 'Consequently you spend your whole time being sold to rather than learning anything new.'
Anglo-Saxon nations have a different outlook. 'I think the continental European countries are being short-sighted in excluding the consultants,' notes Niri's Thompson. 'They can be the only professional IR advisors some companies have, particularly smaller ones which don't have their own departments.' He concedes that corporates should be in the driving seat, pointing out that 75 percent of Niri's board members are required to come from companies. 'But the consultants should be allowed a voice as well,' he insists.
Dutch Courage
Perhaps the difference in attitude reflects, at least in part, the varying quality of IR consultancies around the world. The Netherlands Investor Relations Society (Nevir), in the continental European country whose investor relations industry probably reflects its counterparts in the UK and US most closely, decided last year for the first time to allow consultants to become members of the society.
'We'd been reluctant to include advisors up until then because most of them are involved in PR rather than IR,' explains Frans Bedaux, IR officer for ABN Amro, president of Nevir and chairman of the IIRF. 'But a couple of firms which are very good at what they do put a lot of pressure on us to involve them and so we decided to go with it.' Bedaux recalls that a number of Nevir's members weren't enthusiastic to start with, 'But the consultants have made a great contribution and have put a lot of time and commitment into the organization which should help us grow.'
And, to be sure, the point made by a number of society officials is that the consultants are often more willing and able to give time and energy to the organization than their corporate counterparts. For small IR societies such efforts can be crucial to the range and quality of their endeavors. Bedaux notes that until Nevir increases in size - from its present level of 60 members - it won't be able to expand its current program, which involves holding meetings every six weeks. 'We'd like to build up an extensive education program but first we've got to conduct marketing drives to increase our profile.'
With a membership of over 300, the UK Investor Relations Society (IRS) does have the resources to carry out an extensive program. And this reaches beyond catering just to IROs. This year the IRS launched a series of informal meetings for IR support staff and new people joining the industry at which different speakers offer perspectives on how they do their jobs.
Back to School
Other IRS educational activities include regular meetings with speakers from the financial community, visits to financial institutions, discussion dinners with roundtables on specialist subjects and an annual conference. The society also recently set up a fellowship program conferring professional qualifications on selected members. 'The idea is to raise standards in the industry as well as to promote the profession as a whole,' explains Kate Hoyle, administrator at the IRS in London. 'Six people were awarded the qualification this year and we want to try and keep the numbers small. That way particular individuals will really be recognized for excellence.'
This kind of professional development is also big in North America. Niri runs a week long IR program at the University of Michigan Business School as well as at Bentley College in Boston, the University of California and Northwestern University, Chicago. 'Traditionally, executives have moved into the investor relations function from another role but people are starting to go into the profession directly and we need to acknowledge that shift,' Niri's Thompson comments. In the same vein, this November Ciri is launching a five-day program for senior managers in Strategic Management of Investor Relations at the Richard Ivey School of Business, at the University of Western Ontario.
Education is also an important function of societies in countries where investor relations is less highly developed. Take the Japanese Investor Relations Association (Jira) whose formation back in 1993 was strongly supported by the business world. 'The financial community, particularly the securities houses, were concerned by how much Japanese companies were lagging behind their US counterparts in terms of investor relations,' comments a Jira spokesman. 'Jira was formed to encourage companies to improve their investor relations through education.'
Jira, which now has 222 members, holds monthly seminars, symposiums and forums for investor relations managers and analysts as well as small study groups on specific areas of IR. Last year it launched an awards program, which rewards certain Japanese companies for their excellence in the field of investor relations.
'There are so many abuses among Japanese companies in terms of investor relations that it seems important to make models of the ones who are doing well,' says the Jira representative. 'In our eyes, that is the best way to promote good investor relations which is what we're here for.'
Sun & Fun
San Diego doesn't just boast sun, sea and an impressive rollcall of fast-growing biotech and high-tech corporations. It also has its very own IR society.
Started less than a decade ago by a bunch of enthusiasts led by Scott Reiger (now running his own counselling firm, but then a corporate IRO), the San Diego Investor Relations group has grown from a disorganized group of individuals into a fully-fledged and active Niri chapter look-alike.
Karen Patchen, current vice-chairman and IRO at Encad Inc, has been involved with the group almost since its inception. 'We were very loosely organized in the early days,' she recalls. 'We weren't organized enough to be a Niri chapter then; and now, it seems to be working pretty well as it is, so there's no real incentive to become a chapter.'
Nevertheless, SDIRG does act pretty like a Niri chapter and many of its 100-plus members are also members of Niri. And Patchen notes that Niri has always been very supportive. The SDIRG is now incorporated as a non-profit entity, has ten board members and an impressive program. There are monthly meetings most of the year, apart from in vacation periods; a seminar in May and a couple of lunches. The average turn-out at meetings of around 50 includes corporate IR people and service providers.
The June meeting, tends to be more of a social occasion. This year's, called a Sunset Social, kicked off at 4.30 with speeches by the CEO of Encad and by the director of IR for Molecular Biosystems. With the serious side over, the event then switched to hors d'ouevres, wine and chat. 'We like to give members some fun as well,' says Patchen.