January 26, 2014 by Kathryn Kuttis
Each year salary surveys name investor relations as the highest paid form of public relations. As a result, it is often cited as the most important sub-speciality of PR and the obvious finance nerd in the family.
What makes it more valuable than other highly prized categories like crisis management or public affairs?
Well, one reason is that many people think they can’t do it. From a distance financial terms look complicated and foreign, or worse intimidating. True, finance has its own language but so does every other industry: fashion, sports and entertainment to name just a few. It’s worth learning the basics especially since most of our financial futures (401k, mortgage rates, mutual funds and ETFs) are tied to the capital markets.
IR professionals are highly valued because they use their knowledge of finance, marketing and securities law to establish two-way communication with investors. Each trading day these investors determine the value of publicly traded companies. On a good day, an IR manager is able to facilitate effective two-way communication that ensures their company’s stock gets a fair valuation. This means investors are comfortable with the company’s performance, strategic vision and level of transparency.
IR practitioners are skilled storytellers just like PR professionals. Companies rely on them to explain material news events, meet fair disclosure laws and shape their corporate story. They follow industry trends, network with the financial business media and communicate with analysis and institutional investors. The stakes are high. Their industry knowledge and Wall Street instincts can mean the difference between a well-received merger announcement or a new shareholder lawsuit.
This week students in my J452 class will work to communicate with investors as they write a shareholder letter. I pulled kernels for their blog assignment from business headlines to give them a taste for investor lingo. Rather than a tweet that might describe a company as “trending” a shareholder letter will use an investor term like “driving profitable growth” or “corporate performance.”
Of course, the fastest way to build your vocabulary, expertise and understanding for any industry is to read about it. My guess is that most students will be surprised to find some of the best drama and the most compelling news stories start out in the business pages.
An Alternative Intro for Lululemon’s New CEO (IR Magazine) Is this guy a CEO or the next Bachelor for ABC? What will investors think?
A New Agenda for Directors (NYSE) Got talent? What kind of employees drive future growth?
Facial Hair Trend Hurts Procter & Gamble (LA Times) How is the owner of razor giant Gillette working to reassure investors as facial hair continues to grow?
A Superbowl Estimate With A Life Of Its Own (NYTimes) Peeling back the marketing hype to unpack the numbers. What’s the bottom line?
New Masters of The Art Universe (WSJ) When investors attack: how should companies respond?
Davos 2014: What We Learned (BBC) How are the world’s leaders describing the outlook for the future? Goldie Hawn wants to meditate on it.
Microsoft Hires Ari Mark for Xbox Entertainment (SeattleTimes) Changes to Microsoft’s entertainment business? How do they write about that?
Netflix Customers Get Ready, Higher Prices Are Coming (BusinessWeek) After investors showed their displeasure, how is Netflix handling their pricing communications differently?
Which Country Has The Cheapest Big Mac (Money/CNN) Don’t be afraid this one has numbers in a bar graph. Why does the Economist use Burgernomics to talk about the global economy?
How Social Media Is Fueling the Next $1B Beauty Brand (Forbes) What’s this company doing that other aren’t and why do investors care?