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.
