As the corporate world’s ambassador to the general investing public, investor relations (IR) representatives are a critical part of any public company's team.
Not only are they responsible for fielding investor inquiries, expanding the shareholder base, helping raise capital, and managing investor meetings, but their frontline experience allows them to gauge sentiment and provide management with owner feedback. While many companies choose to outsource this position to third-party firms, I strongly believe this is an in-house role. In-house IR reps have immediate access to company management and deeper context around business development, which is required for effective shareholder communication.
Given their importance, public companies can't afford to have an average IR rep — they need top caliber. Serious evaluation and consideration should go into the hiring process for this position. Below, I'll discuss seven key traits of a top-notch investor relations representative.
1. Well-versed in securities law
First and foremost, an investor relations representative must have a deep, up-to-date understanding of securities legislation. This ensures their communication with investors is timely, compliant, and consistent with management. While shareholder communication should be creative and visionary, many securities violations stem from misrepresentation or improper disclosure.
Know the rules of the game and abide by them.
2. High emotional intelligence (EQ)
When money is on the line, as it is for shareholders, emotions can run high — particularly when a stock is underperforming.
Emotional intelligence (also known as the emotional quotient, or EQ) is a key determinant of how well a person can empathize and connect. Instead of falling prey to the emotions of others (i.e. investors, brokers, analysts), the elite IR rep has the emotional intelligence to perceive, understand, and manage human emotions. This is a very important trait, as no one in the organization will deal with the public more than the IR rep.
3. Genuine passion for the company and its industry
IR professionals who are passionate about the company they represent are often highly educated about the industry in which it operates, making them a reliable source of information for investors while being on the cutting-edge of the sector’s evolution. If they have an intimate understanding of the sector, it helps them articulate to the average investor where the company is headed. A passionate IR rep can be an invaluable asset in building investor confidence, which may help support a higher valuation.
4. Takes responsibility
No individual or company is perfect. Inevitably, there will be missteps along the way. When faced with criticism, the elite IR rep doesn't pass the buck. Shareholders have little patience for that kind of behaviour. Instead, she holds herself and the company accountable for their shortcomings — and more importantly, finds ways to overcome.
5. Is well-spoken, but an even better listener
The elite IR rep has mastered the art of conversation, allowing them to relate to strangers and build rapport quickly. However, they know that being able to speak well is only half the battle — even more important than the ability to talk is the ability to listen. By combining articulate speech with attentive listening, the elite IR rep can provide adequate answers to investors.
6. Creative
The investor relations role goes far beyond shareholder conversations or simple phone jockeying. The elite IR rep is a curator of company storylines, corporate presentations, and overall branding. They need to be well-versed in creative writing, business writing, and have the ability to create visually appealing presentations.
7. Investor relations means relationships
The elite IR rep is almost like a distant relative to many shareholders. By that, I mean they should have personal relationships with many of the “regulars” that contact the company. The best IR reps I’ve met have had remarkable relationships with some of their company’s shareholders — to the extent that they know the names of their grandkids, their hobbies, and even their favorite whisky. It’s not uncommon for a high caliber IR rep to get invited to golf and fish with shareholders. There’s a special bond there.
Strong investor relationships is a critical part of being a public company
Investor relations representatives play a pivotal role in the growth of every public company. Often a jack of all trades, IR reps humanize otherwise faceless, corporate entities while facilitating a valuable channel for communication between management and shareholders. With so much riding on this position, public companies should actively seek out an elite IR representative — and if they can't find one, incubate their own.
