Historically, the investor relations and public relations functions within a company have been siloed, if not misaligned. As lines between stakeholders blur and the ways they consume information expand, aligning IR and PR is no longer a “nice to have” collaboration reserved for large organizations. It is a critical component of the success of every company; without this collaboration, your company risks opening itself up to reputational risk and leaving significant shareholder value on the table.
The Edelman Financial Communications team recently hosted a series of fireside chats at the National Investor Relations Institute’s (NIRI) Annual Conference with top investor relations and communications directors from PayPal, Etsy and Ford Motor Company that focused on how to execute an integrated communications strategy. Below are key insights from the session on why the close alignment of IR and PR is essential:
- Rise of Employee Activism
Employees are no longer just an internal focus. External audiences are looking at how you treat your employees, and employees are talking directly to your external audiences. According to the Edelman Trust Barometer Special Report: Institutional Investors, 95 percent of investors say maintaining a healthy corporate culture impacts their trust in a company. In addition, employees are now vocally advocating for change; employees have sent letters to activist investors highlighting pain points that the firm should be calling the board out on. Educating employees on the company’s strategy and providing regular updates on performance will empower employees to feel part of the journey, drive better engagement, and enable them to serve as amplifiers of your company’s message.
- Blurring Lines of Influencers
As newsrooms and editorial teams shrink and the media landscape continues to evolve, we are seeing the lines of where key influencers sit blur. CNBC’s Jim Cramer is a perfect example of this. Is he media? Is he an analyst? In addition, sell-side analysts frequently publish reports on news rumors, and media use the sell-side as sources for their stories, even basing entire articles off one analyst’s opinions. IR and PR directors must be aligned when communicating with these key influencers to ensure consistency in messaging.
- Increasing Importance of Owned Channels
As investors increasingly monitor PR and HR channels, and the financial media continues to contract, creating your own stories and driving your own message is now essential. Social media is the perfect tool for owned storytelling as it helps reach investors, media, employees and customers. This is especially true for key IR events such as earnings and investor days. According to our analysis of the Twitter accounts of the top 250 U.S. companies by market cap, nearly half are using their pages to promote earnings content. In addition, 86 percent of investors say they consult a company or an executive’s social media channels when evaluating a current or prospective investment.
- Corporate Transformations Demand Complete Communications Integration
The notion that the success of a major transformative event is solely dependent on investor reaction is short-sighted. There are a number of other stakeholders who play a vital role. IR and PR professionals need to take into account other measures of success when preparing for important announcements such as employee retention during a CEO transition, regulatory approval for an acquisition, media reaction to a business strategy reset, or customer reaction to the sale of a business unit. Stakeholder mapping is a critical first step in planning for a transformative event. From there, IR and PR teams can more easily align on messaging for all stakeholder communications as well as identify the materials and platforms needed to communicate with these audiences.
While a fully integrated IR and PR program can take time to build, there are some simple steps that companies can take to more closely collaborate, achieve their individual objectives, and better serve the interest of all stakeholders:
- Give each other a seat at the table by allowing PR teams to sit in on investor calls or having IR participate in meetings with reporters;
- Meet regularly and take a collaborative approach to all stakeholder communications;
- Align on all recommendations before meeting with executives;
- And, most importantly, work together to develop a clear and concise corporate narrative.
By taking these necessary steps to building a truly integrated communications function, not only will your shareholders benefit, but so will all of your company’s stakeholders.
Stacy Turnof is senior vice president, Financial Communications & Capital Markets, New York.
Nicole Briguet is account supervisor, Financial Communications & Capital Markets, New York.
Ted McHugh is executive vice president, U.S. head of Investor Relations, New York.