Over the past few years, the world of investor relations has been dominated by talk of a pending technological revolution that would forever alter the way companies attract and retain investors. Among other things, we’ve heard about the freedom that will come with “Web disclosure” solutions. Countless conferences, webinars and white papers have centered on how skillful use of social media tools such as Twitter and SlideShare will take “investor engagement” to new heights. We’ve heard how virtual road shows will improve the time efficiency and cost effectiveness of investor targeting efforts. And we’ve been told how increasingly sophisticated website functionality will replace the traditional annual report.
Amid all this talk, however, one critical component has been overlooked – content.
The most sophisticated technology tools and integrated communications channels cannot make up for an indistinctive value proposition that fails to clearly address the basic question in the minds of all investors: “Why is now the right time to invest in this company?”
In no particular order, here are five key messaging areas to consider as you work to keep your IR content as strong as your IR channels:
- Innovation – Every company claims to be innovative, but how many can prove it? By establishing a consistent and accurate metric and reporting it to investors (e.g., a vitality index that captures the amount of revenue generated by products launched over the past three to five years), you will be able to more fully leverage this important value driver.
- Use of Cash – With balance sheets restocked with cash, investors are anxious to understand how these dollars will be deployed effectively to spur growth and drive value. They want to know what criteria the board and management are using – and over what timeframe – to determine the best uses of the cash to generate value.
- Governance – Investors consistently rank quality of governance as pivotal to strategy execution and shareholder value creation, and they expect transparency around a variety of governance issues. Succession planning is a key area. Investors are also becoming more acutely focused on the qualifications of each director and want to understand how each contributes to the company’s strategic growth plan.
- Corporate Social Responsibility – Socially responsible investing now accounts for more than $3 trillion of assets under professional management in the United States, and 40 percent of all shareholder proposals voted on in 2011 focused on social and environmental issues. Among other things, investors want to see the quantitative and qualitative impact of the company’s CSR efforts on its financial results.
- Enterprise Risk Management – As humorist Will Rogers said, “It takes a lifetime to build a good reputation, but you can lose it in a minute.” These days, it might not even take a minute. Today’s investors want to know how companies are measuring and monitoring their reputations with key constituents and how they are using this intelligence to mitigate the impact a crisis would have on the company’s reputation and valuation.
The effectiveness of your technology tools may help draw investors to your company, but the actual ROI on these channels – and your chances of converting interest into investment – will be greatly impaired if the quality of your content fails to hold their attention.