From Stakeholders to Allies: Integrating Investor Relations to Drive Best Practice Communications
In today’s fast-paced, interconnected and quick-response business world, effective communication is a successful organization’s lifeblood. And while many recognize the importance of Investor Relations (IR) in engaging the financial community, IR’s untapped potential related to internal communications often goes unnoticed and under-utilized. But teams are increasingly realizing that leveraging IR within internal communications can yield transformative results well beyond the financial markets.
Below we discuss how IR can play a pivotal role in fostering internal support and engagement while improving publicly listed companies’ overall communications consistency and efficiency; aligning your internal stakeholders to deliver and communicate a unified message.
The following are some examples of how IR can benefit from partnering with internal stakeholders, team leaders and your corporate communications team:
1# Make internal stakeholders your ESG allies
ESG’s increasing importance has led external stakeholders- the financial community as well as eco-conscious consumers- to require companies to report and disclose related non-financial information. A recent study by McKinsey and NielsenIQ found that consumers are increasingly spending on products marketed based on favorable ESG claims. The study showed that related sales grew on average by 28 percent over the last five years, compared to 20 percent sales growth for products without ESG-related claims.
Your internal employees are an invaluable resource, particularly for “environmental” and “social” ESG-related data. IROs who can articulate the importance of aligning corporate practices with ESG standards to their internal audience can also boost overall internal engagement and commitment towards sustainability.
Additionally, working closely with your corporate secretary enables IROs to gain more in-depth governance knowledge that will help them address investor questions with greater confidence and a firm grasp of the facts- particularly relevant when a company is navigating macro headwinds.
2# Align your equity story with your corporate communications strategy
Successful IR teams don’t work in silos. Aligning your equity story with your corporate communications team enables IROs to establish a clear and consistent equity story and enrich it with new developments and initiatives driven by the key business units with whom you’re in close contact.
It’s equally important to ensure that Marketing and Corporate Comms teams that are communicating externally clearly understand IR’s role and why the narrative matters from a shareholder point of view as well as from the consumer and employee perspective.
Partnering with your communications team enables a more robust and consistent communications strategy, particularly when the company is under scrutiny or potentially facing shareholder activism.
3# Boost your credibility with the Board
While the IRO’s primary role is to ensure two-way communication between the investment community and the board, those who have gained internal stakeholders’ trust are optimally positioned to provide the board with a more comprehensive overview of the business.
Acting as external and internal stakeholders’ first point of contact elevates IR’s role to be more strategically relevant to management. Beyond looking at pure financial data, IROs are also expected to articulate how the corporate strategy will translate into day-to-day operations, for which a 360-degree view of the business is imperative.
4# Leverage your role to successfully implement change
Driving change isn’t easy, particularly related to an acquisition, transaction or IPO. An IR team involved in the process has a deeper understanding of the deal’s implications for the company, also from an operational, cultural, and financial perspective.
Studies show that roughly 70% of change implementations fail, mainly due to employee pushback and/or a lack of management support. IR can help facilitate the process by providing valuable insight and by creating a purpose-driven approach.
5# Drive employee engagement by making them part of the success story
IR can also provide internal stakeholders with a holistic view and understanding of the company’s performance, strategic goals, and updates, which could build a more engaged employee base and transparent corporate culture.
According to a 2020 Gallup report, companies with engaged workforces have higher earnings per share (EPS) and recover from an economic crisis more quickly.
To conclude: there are many benefits to involving IR in internal communications initiatives, and adapting the message to your internal audience while encouraging two-way communication are crucial to your success.
Building trust, deepening overall employee engagement, supporting change management, amplifying the corporate culture, and ensuring consistent communications on performance and strategy enables IR teams to play a vital role in aligning internal stakeholders with your company’s strategy and objectives.
To learn how InspIR Group can help you to effectively integrate IR to drive best practice communications, please contact us at:
Monique Skrunzy: monique@inspirgroup.com | +1 212-661-2243
