Opinion: IR heads should break out of silo mentality

Investor relations directors are a different breed from PR folk, or so most would like us to believe. Certainly on the other side of the Atlantic no self-respecting IR director would be found within a stone's throw of the corporate communications department, and the concept of a combined financial PR and IR agency is virtually unheard of.

Here in Europe, and especially in the UK, that divide exists, too, particularly at the very top end of the FTSE-100.

However, you do see far more examples of corporate comms heads with IR responsibility - Invensys's Victoria Scarth, Big Food Group's David Sawday, Scottish Power's Dominic Fry and British American Tobacco's Michael Prideaux to name but a few. Likewise, most of the lead financial agencies claim to offer IR counsel.

But at the end of the day, the breadth of the divide often seems to come down to resources - companies with a big enough staff will seek to preserve the silo mentality.

This career divide has of course been reinforced by the relative career prospects of each role. When it comes to a race to the top, the odds are a great deal shorter on an IR director than on a corporate comms head.

Never mind that corporate comms budgets often outstrip those of IR departments, or that a majority of corporate comms directors now report directly to the CEO. The fact remains that a worryingly large number of IRs still see their craft as completely divorced from that 'lesser discipline' of PR or corporate comms.

But for how much longer can this be the case, particularly if investor relations directors wish to continue to carve out career paths into senior management?

Over the coming weeks, the City press is eagerly anticipating continued rows over 'fat cat' payouts, including controversy over GSK chairman Richard Sykes's share option windfall and ITV chief executive Charles Allen's potential £2.8m share award top-up. There may be sympathy for remuneration levels in some quarters of the business press, but any editor worth their salt recognises there is now a real public appetite for information, particularly with regards to perceived payments for failure.

And even if the public appetite wanes, there is a whole new breed of dynamic shareholder activist who will ensure that pay remains high on the media agenda. Combine this with high-profile corporate governance legislation and the preponderance of social responsibility indices, and insularity on the part of IR professionals begins to look suicidal.

Put bluntly, the IR story has become the major corporate story. And as CEOs and the reputation of their organisations come under greater scrutiny, aspirational IRs may find that they have a great deal to learn from their lowly PR brethren.

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