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
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
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
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