In the world of Investor Relations, no one wants to think of anything as a “trick.” Yet, as Halloween approaches, I can’t help but use the holiday theme. So today, we talk about IR Trick or Treat!
The Fun Size Snickers Bar Treat: The Investor Relations Society will be awarding their IR Best Practice awards next month at a November 25 ceremony. Several categories make certain that there will be a little something for everyone when the judge’s remarks come out. Check out the “shortlist” here: http://www.ir-soc.org.uk/index.asp?pageid=267
The Vandalized Neighborhood Trick: The recent financial meltdown has left no corner of the markets unscathed. Unfortunately, not all the bad actors will be punished, and several of those who have no blame will be scarred in some way by recent events. Let’s hope that all the financial maneuvering by various governments and central banks make things better soon.
The Snack Size M&Ms Treat: The IR Magazine 2008 Continental Europe Awards were given out in October. While the magazine does not release its findings and reasons to the general public in order to be able to sell them as a for-fee study, the results give IR departments world wide a place to look to see what good cutting edge IR looks like.
The Toilet Paper Covered Trees Trick: When things go bad, it is human nature to try and find the bad guy that caused them. When things go bad and the media is around, the first finger pointed is the last point reported. The media (and thus the politicians who crave their attention) have pointed their quick finger at “excessive executive compensation.” No one would disagree that corporate boards at some companies have become rubber stamps especially when it comes to CEO pay, but if we “fixed” executive compensation tomorrow, would that make everything better? Probably not. Let’s hope that the focus here doesn’t preclude thoughtful examination of other potential problem areas.
The Healthy Snack “Treat”: There is one in every neighborhood, that family that gives out carrot sticks or some other healthy snack to combat all that candy. No one likes to see the kind of mess the economy and markets are in right now, but the silver lining is a wake-up call to all investors, lawmakers, regulators, companies, and employees. Things can and do go wrong. Going out on a limb just because something “seems safe” is a recipe for disaster. Recent events should cause some of the hundreds of people I’ve seen laughing at good solid financial advice because they found the “secret” in some book or website to re-evaluate their financial situation and hopefully make moves to more solid grounding.
The Ratings Agency “Trick”: Those of us who work in the world of investing and finance have been wondering since day one what the media has just started noticing. How could all of these HIGHLY RATED investments just up and crash like this? What good is a rating or a ratings agency if they can’t see a train wreck this big coming? Hearings in the US Congress have been predictable, but people remember.
The truth is that at the end of the day, times are tough for the IR world, and they aren’t going to get easier any time soon. But, the good news is that there is a renewed focus on investor communication, especially from those companies who are eager to show that they are not in the same boat as others. Investor Relations has sometimes been slow to evolve usually due to regulation and uncertainty about liability. Now, with the focus on transparency and making sure investors are getting the straight story, maybe the IR industry will be able to leap ahead.