EDITORIAL: Time to open IR information taps

A study published by Brand Finance this week is something of a condemnation by analysts on the work of in-house investor relations directors. Seventy-five per cent of analysts believe that in-house IR directors should publish more information on such matters as marketing, brand and advertising as incorrect valuations may result if not all the necessary information is in the market.

A study published by Brand Finance this week is something of a

condemnation by analysts on the work of in-house investor relations

directors. Seventy-five per cent of analysts believe that in-house IR

directors should publish more information on such matters as marketing,

brand and advertising as incorrect valuations may result if not all the

necessary information is in the market.



The problem arises because IR directors are in the business of managing

the flow of information to protect commercial interests and maintaining

a robust share price, whereas analysts need more information to provide

new insights. But the report’s conclusions are surely correct to suggest

that it is in the interest of IR directors to reveal more information in

their reports because the lack of detailed information could well be

having a detrimental effect on their overall share price.



The argument that IR directors use in the report is that greater

disclosure would seriously compromise a company’s position in its sector

is not valid, when one compares the situation to the US where

information is more easily available and there is no evidence of this

having a negative impact on the companies concerned.



Moreover, as the report concludes, analysts can actually get the

information through a range of alternative sources, and with the growth

of the internet the possibilities are endless.



Research done by the Investor Relations Society last year showed that

the average in-house IR salary rose 23 per cent in three years to pounds

76,000.



A cynic might suggest it is time for them to be more practical in terms

of earning their keep.



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