A monumental shift in today’s equity markets has redefined the relationship between companies and their investors. Today’s CEOs are navigating a new world in which activist shareholders; index funds like BlackRock, State Street, and Vanguard; and long-only investors are increasingly willing to weigh in on company strategy, ESG, executive pay, and board composition.
The Changing Role of the Investor Relations Officer
When companies are surprised by activist shareholders it’s often because management and the board don’t have a good idea of what investors are thinking and what their hot-buttons issues are. Today’s CEOs need a new breed of skilled investor relations officer (IRO) to bridge the gap. This person must be a proactive leader, building constructive relationships throughout the shareholder base to help the company mitigate various risks. CEOs need to give the IRO a clear mandate to quarterback investor dialogue and get buy-in around all of the elements of management’s long-term strategy. The IRO must be part of a unified board and C-suite investor planning group, and their responsibilities should include building and sustaining credibility with long-term investors, and providing useful information on a timely basis.