Investor Relations Officers: What your CFO is Thinking!

If you are like most Investor Relations Officers (IROs), you report to the Chief Financial Officer of the company.

Your boss may be an exceptional communicator who not only clearly articulates what is expected of you, but also provides sound coaching and guidance along the way. But if not, here is what the CFO is thinking but hasn’t told you:

“In order to earn my confidence, demonstrate your value to management and the board of directors, and be considered for advancement to executive-level responsibility in the future, do the following:

1)    Know our company and strategy inside and out, and know more than our head of human resources about each of the company’s C-level and top operating executives.  Be aware of our executives’ career histories and accomplishments (and missteps) both here and at prior employers, and even know certain of their personal and family interests. This knowledge is crucial to fully inform your strategies that colorfully communicate our company’s story, defend our reputation and help us forge personal connections with valued current and prospective investors.

2)    Learn what our management and board want to know about our competitors and industry, and demonstrate your general business acumen by not only expertly gathering and periodically disseminating that information, but by deriving actionable conclusions that they come to rely upon for decision-making.  Of course, your work must complement what the Strategy and Corporate Development Group provides and you and I must be on the same page before it is reported out; but, once I approve, in addition to releasing succinct and compelling written reports, be prepared to stand with confidence and articulately present the points to management and/or the board of directors.  Anticipate their questions; how you engage and respond will be your defining moment.

3)    Be my top advisor on all matters– macro and micro– that pertain to current and prospective investors.  The CEO and I might think we know our key holders better than you do, but prove us wrong.  For example, I may know the top five things on any given investor’s mind, but you might tell me which of the five are most important to her.  Also, when I am about to meet an important prospective investor for the first time, tell me something about him, either professional or personal, that will help me make the optimal connection.

4)    Be courageous.  Have an informed opinion about matters of strategic importance to our company and be prepared to assert them when called upon to do so, and perhaps even when you are not.”

I heard an interesting story on this.  Recently, a company CEO made a compelling presentation to his executive committee which won their unanimous and enthusiastic support for an unplanned acquisition.  Fully aware that the company had been telling its investors and prospective investors for over a year that its near-term strategy was to focus exclusively on new product innovation and organic growth, the IRO stood alone and articulately spoke against the acquisition saying it would divert capital and momentum away from the internal growth strategy that had been so thoughtfully and deliberately conveyed to investors.

Days later, the CEO aborted the deal and called to thank the IRO for weighing in with her insight.  Separately, in the days that followed each member of the executive committee stopped by the IRO’s office to express his or her appreciation, and say she was right.

5)    “Communicate–no, over communicate with your constituents, including me, until you learn the nature and frequency that best suits each. Be genuine, be yourself, and above all, be clear.  I cannot emphasize this enough.  Your credibility rests with your skill to accurately and frankly communicate with all stakeholders.  This includes confessing when you do not have the answer and promising prompt follow-up.

Do these things and you will be successful here as IRO.  Do them exceptionally well and you will have our attention and be perceived as someone we should keep an eye on for future leadership-level responsibility in our company.”