Investor relations is like an adolescent whose growth has been stunted by rickets.
I should know. I'm geriatric enough to have been around at the birth and see it try to grow up. I'm saddened by what I see. Its great potential has been squandered by cautious homogenization.
The profession began with every good intention. In the '50s, publicly held corporate America was strangling from wishful thinking - hoping and praying to win investor confidence and realistic valuation, but not having a clue how.
Then along came us turncoats - veteran Wall Streeters and financial writers - who saw a future in switching sides and teaching CEOs how to talk the numbers and build lasting credibility. We preached that past performance was only half the story, half the valuation, and that any management actively seeking wider street sponsorship had a price to pay - sharing their dreams with investors, laying out a strategic game plan, talking about tomorrow in realistic scenarios. We preached transparency and an open-door policy.
It paid dividends. Investors were emboldened by a buoyant economy and Reg FD, which leveled the playing field. IR celebrated puberty and was on a fast track.
But the party was abruptly interrupted. The market bust, Enron, Sarbanes-Oxley, and other wet blankets doused the fun. The nation's business seemed to pull in its horns. A puritanical overreaction swept the land. Lawyers took control and muzzled management.
In all this, a pall descended upon communications. Practices and policies reverted to the Dark Ages we all had worked so hard to overcome. The Era of Enlightenment became the Era of Obfuscation.
Instead of bucking these trends, most of the industry finds it easier and safer to tell the CEO what he or she wants to hear.
I saw this shift firsthand from a fascinating vantage. I was offered a chance to view communications from the other side - as a business columnist. In that role, I have seen an amazing syndrome of nervousness and paranoia grip the C-suite, the financial department, and, consequently, the IR resources. Hiding behind voicemail veils, IR pros commonly focus on moving memos from the in-box to the outbox.
Where's it all going? I see the trend as cyclical. As the capital markets (always cyclical) become less hospitable and as the corporate orphans find their valuations and equity leverage for growth even more disadvantaged, I think managements will awake to the critical need for aggressive outreach and true transparency.
I've always been convinced that IR was never a science, always an art form. And when its unique historic powers to gain understanding and lasting support are again deemed vital, it will see a renaissance. History will repeat itself - for the benefit of investors, corporate growth, the economy, and the hapless souls patiently laboring in the communications vineyard.
Ted Pincus is managing partner of merger and management consultants Stevens Gould Pincus, the business columnist of the Chicago Sun-Times, a finance professor, and former owner of the Financial Relations Board.