COMMENT: PLATFORM; Stop being hypersensitive about hype

Investor relations professionals should climb off their pedestals and consider doing some old-fashioned PR, says Leonard Baker

Investor relations professionals should climb off their pedestals and

consider doing some old-fashioned PR, says Leonard Baker



Investor relations practitioners are, by and large, a respectable breed.

Therefore, to suggest to them that there is not enough hype in their

lives sounds like a prescription to kill rather than cure.



But judging by today’s unprecedented competition to gain corporate

visibility, understanding and support from the financial community, that

is just what is required.



A broker friend recently demonstrated this point to me. He held up a

copy of the Wall Street Journal showing 2,000 listed companies on one

page and said: ‘Find me the next Microsoft.’ I looked sheepish.



He added: ‘A lot of companies are like Hollywood starlets waiting to be

discovered only they feel it’s a bit vulgar to really try.’



There has always been a view held by certain professionals that to

pursue an aggressive investor relations programme smacks of Jersey City

bucket shops and Amsterdam boiler rooms. You cannot market shares,

affirms conventional wisdom, like cans of baked beans and tubes of

toothpaste, and to do so might put off the very investors you are trying

to reach.



Perhaps. But it might not be a bad idea for some of us in the financial

communications business to take a look at how brand managers go about

selling their wares. I think we can learn something from the

thoroughness of their market research, their intense efforts to get the

sales message clear and right and, above all, their flexibility in

seeking new ways of promotion.



The word promotion may rattle a few sensibilities, but isn’t that an

important part of the job of the investor relations professional?



I am frequently astounded by the calls I hear for caution from the pros.

I remember one sage warning his client that to get more than two

corporate profiles a year in the financial press would be interpreted by

the investment community as hype.



Another popular argument is, never take a roadshow to New York, London

and other financial centres more than once a year. Why not, if you have

got a lot of developments taking place and you need to explain their

significance?



Of course, the contention in taking the offensive is fine when you have

something positive to report. But what do you do when quarterly earnings

head south? Isn’t that fatal to the credibility of the company and a

contingency that should always act as a break for an overly aggressive

investor relations effort?



To quote Mr Gershwin: ‘It ain’t necessarily so’. Brokers, analysts, fund

managers and the press respect managements that are prepared to talk to

them through thick as well as thin. Besides, being up front provides the

company with an opportunity to explain the nature of a particular

problem and how it intends to deal with it.



At the end of the day, one has to recognise that people are not sitting

on the edges of their seats desperately waiting to hear from you. A

company that wants a quiet life can easily have its wish fulfiled by

remaining quiet.



So why not take the offensive and get some attention by putting a little

hype in your life?



Leonard Baker is chairman of financial consultancy Baker PR Associates



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