A Swedish guide to ‘analyst massaging’: how to balance storytelling and information provision

Now and then, claims are made that public companies have said or implied information in closed rooms that affected the perception of the firm. Someone with this information may then adjust their estimates, or perhaps even trade in the security.  

Illegitimate information provision is of course against the rules and nothing that a serious company deals with, or even gets close to. The regulations for what constitute confidential information are clear. Likewise, it is fairly easy to determine when a hint evolves into a clear advice.  

Still, suggestions that some companies allegedly perform an ‘analyst massage’ still persist in the Swedish media.

I think we can agree that one of the IRO’s central duties and responsibilities is to ensure transparent and compliant information provision. But I firmly believe that the responsibility is also to build the financial brand. To contribute to knowledge of the company, understanding of the business model and which critical factors affect earnings, as well as to profile and make senior executives visible.

My experience is that the three watchwords to stick to in this work are: create visibility, simplify and repeat your story.

The roots of misconception

It is in this balance between information provision and brand building that I believe you can find at least one of the roots of misconception about alleged massage.

If you work seriously to build and maintain the company’s financial brand, it also means — by definition — that you tell a lot about the company. An IRO who does this professionally and knowledgably also increases interest in the company and acts as an eye-opener for both investors and analysts.

To succeed in this profession, an IRO must know the business well. They are also often a good storyteller.

But in telling these company stories, there are always elements that, for some, come as a surprise and are perceived as news. This cannot reasonably be massage. On the contrary, it is good for the market to increase understanding and knowledge of the company as a potential investment.

There is an art to doing this in a consistent and appealing way. In the often-lonely IRO role, this work competes with the more formal duties and needs of the local market.

Several of my colleagues have more of a background in finance than communication, which must make the storytelling step take a little longer. At the same time, in smaller countries such as Sweden, the smaller media arena also creates a limitation in how well one can succeed.

Instead of criticism and suspicion towards the IRO, we need a discussion about how to tell the story well and to shine a light on those that do it well.