NIRI Recap: Effective Communications, IRO Trends and Advocating Reform

Posted by | June 16, 2011

This week, Orlando, Florida was transformed into the epicenter for the Investor Relations world.

That’s where approximately 1,300 Investor Relations practitioners and service providers from around the world gathered for the National Investor Relations Institute’s (NIRI) annual conference.  It was an opportunity for Investor Relations professionals to discuss trends in corporate finance, governance and capital markets, and to learn how to help their employers enhance access to low-cost equity and debt capital.

Attendance at the 2011 conference increased strongly from 2009 when corporations and service providers were still dealing with the effects of a sagging U.S. economy and market volatility. In addition, NIRI officers reported that 15% of this year’s conference-goers were from outside the U.S., representing every continent except Antarctica.

This year, the event’s theme was “Leadership in a Changing World.” More than 100 speakers participated in over 40 panel discussions and workshops on topics such as:

  • Financial modeling
  • New developments in establishing International Financial Reporting Standards
  • Investor Relations in the Initial Public Offering process
  • How to produce an Investor Day event
  • How to diversify your shareholder base through targeting domestic and international institutional investors
  • Ethics
  • Trends in disclosure regulations and earnings guidance
  • Trends in shareholder activism, including say-on-pay and executive compensation
  • How to use Social Media in Investor Relations

I was honored to have had the opportunity to moderate the “Managing Expectations: Effective Communication for Strategic Events and Audiences” panel discussion. A summary of my remarks is posted on NIRI’s website (and a special thanks goes out to Ali O’Rourke, Managing Director of the Global Corporate Client Group at NYSE Euronext for her recap of our panel, which was published to the exchange’s “View from the Floor” blog).

Keynote speakers included:

  • Adam Bryant, a New York Times columnist and author, who shared with us what he has learned from his column The Corner Office;
  • George Barrett, Chairman and CEO of Cardinal Health, who provided us with his perspective about leadership in a changing world; and
  • Michael Darda, chief economist at MKM Partners, who shared with POV about what’s next for equities and the economy.

With such a variety of speakers, sessions and workshops, there were a lot of interesting discussions. In particular, I came away with the following:

  • There is no substitute for clear, concise, consistent communication with investors, and other key influencers. This is essential to compete for low-cost capital and fair valuation.
  • Although social media can be an efficient way to distribute company information, face-to-face exchanges with investors are still necessary to effectively convey a company’s value proposition along with corporate updates. Oftentimes, this can be achieved through non-deal road shows or an analyst day.  A deeper understanding of an executive’s ability to deliver measurable results and value usually comes by looking him or her in the eye.

As the world’s largest IR association, with 3,500 members representing 2,000 companies, NIRI plays an important role in advocating on behalf of its membership. Over the next year, NIRI plans to send a comment letter to the Securities and Exchange Commission (SEC), calling for increased transparency in short-selling and stock lending. NIRI is also working for changes in proxy solicitation and related processes.

Both of these campaigns will be interesting to follow in the coming months, as they stand to have a significant impact for IROs across the United States and around the world. As I discuss in “Repositioning a Small-Cap Company,” published in the June/July 2011 issue of IR Update, IR professionals need to be realistic and fair when it comes to identifying and presenting metrics to targeted investors. Staying up on the current issues facing the industry is one of the best ways to represent your company effectively.

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