Investor Relations: How Investors Learn About Your Company
When it comes to investor relations (IR), remember that your company’s Internet presence often makes the first impression. In today’s frenetic capital markets environment, potential investors will often use your corporate website to quickly understand the fundamentals of your business before they decide to allocate time to a meeting with management.
The primary purpose of having a corporate website, of course, is so that you can easily share your company’s “story” with the marketplace. In order to be effective, the story must be communicated thoroughly, accurately and consistently across your website and all of your digital media, in a way that is easy for visitors to consume, understand and navigate.
While this may seem like an easy feat, we have come across many embarrassing oversights that could have easily been prevented by employing a more diligent and thoughtful approach to digital content creation. Let’s review the fundamental components of an investor friendly website and consider some of the basic rules that should guide an effective digital IR communications strategy.
Website Fundamentals
Here are some of the basic components that your corporate website should include:
- Company story. What does your company do? What are its origins? What is your corporate mission/vision? In this section, you should answer these three questions as clearly and concisely as possible in order to lay the informational foundation for all that follows.
- Corporate strategy. Now that visitors are generally acquainted with who you are and why you exist, it’s time to address the “how.” How will your company execute to fulfill its mission?
- Management team. As you know, execution depends heavily on the quality of the executives at the top. In this space, share the individual bona fides of your organization’s leaders.
- Board of directors. Your board is of great interest to current and potential institutional investors. After all, these individuals are tasked with working on behalf of the investment community, among other responsibilities. If possible, don’t stop with pro forma biographies. Your company has taken great care to build a complementary team of directors. What unique attributes does each member of your board bring to the table?
- Links to key documents and filings. Public companies should maintain active, functioning links to SEC filings, earnings call webcasts, clinical studies and other important external information.
- Upcoming events. You want current and potential investors to take part in upcoming events, such as conferences. Make it as easy as possible for them to learn the essential information about these events. Who is involved? What will be covered? When is the event? Where will it be held? Can those who cannot attend in person participate remotely?
- Contact information. Don’t make visitors work to figure out how to contact you. Ideally, your IR website will deliver all the necessary information, but if investors have specific questions, the procedure for reaching out should be apparent and self-explanatory. How can they arrange to talk to management, whether it’s at a conference, corporate headquarters, or over the phone? Personal interaction is still valued by the market, perhaps today more than ever. Make it easy for your potential investors.
Now that we have covered the basics, here are some golden rules to follow when creating and updating your company’s website:
- Be consistent. A high-quality IR website is vital, but it is by no means the only place investors will learn about your company. They will explore all of your corporate messaging — your marketing website, your social media channels, your executives’ speaking engagements, etc. Every piece of messaging must be aligned. When you make a claim or present information publicly, ensure that your messaging across all platforms is updated accordingly to avoid presenting conflicting information.
Message misalignments create confusion in the marketplace. Communication discrepancies can sometimes result from having separate teams working on separate messaging assignments in silos that prevent collaboration and information sharing. If your marketing and investor relations departments don’t have much to do with each other on a day to day basis, for example, it should come as no surprise if they’re delivering misaligned messages.
- Be mobile-friendly. Don’t assume that everybody is reading your website and distributed materials on a desktop computer. Increasingly, institutional investors appreciate the ability to consume your company’s information on the road as easily as they would from the comfort of their office. Tailor your communications to be consumed on mobile phones and tablets.
- Don’t send investors on an electronic wild goose chase. When you send out an email notification regarding a new SEC filing or press release, for example, be sure to include a direct link to the document itself. If you put the onus on recipients to go clicking around your website to find the information, you run the risk of frustrating your audience and losing their attention.
- Remember the outside world. You’re not the only one communicating about your company. If there is relevant news on the FDA website or in an industry trade magazine, for instance, include it in your messaging and discuss how it relates to your business. Other examples of germane “outside” information include sell-side analysis and surveys of doctors and patients. Stay current and demonstrate your knowledge of the industry by incorporating such information.
Like it or not, you and your management team are ultimately responsible for ensuring that your company’s online content and messaging will make a positive first impression on members of the investment community. Our team at Westwicke can be a great resource to help you deliver better digital content and other types of messaging. To learn more about our approach to devising an effective IR communications strategy, read our post, “Fine-Tune Your IR Website for Success.”
Mike Piccinino is a Managing Director on Westwicke's medical technology and diagnostics teams. He has extensive experience in the buy-side investment process. He has a BA from James Madison University.
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