Where Should IROs Come From?
Here's my response to an item in Inside Investor Relations about a survey finding that "the majority of top IROs [investor relations officers]
have a financial background," that "three quarters of leading IROs worked in finance, accountancy or as an analyst
before taking up a role in IR" and that "just 10 percent arrived via a position in corporate communications."
The finding that IROs come from finance etc. is not surprising. It's been the trend
for decades, and it makes plenty of sense, given the technical nature of the position. What CFO wants to have to train
a new hire to read financials and to understand securities laws, markets, the structure of the investment community, and the
fundamentals of securities analysis?
In addition, if the IRO
position includes establishing rapport with professional investors, a background in the securities industry can be helpful.
The situation is similar to what appears to be developing in social marketing in the high tech industry-techies are being
hired instead of marketing or PR types. The situation is also reminiscent of the problem faced by editors when hiring
reporters-should they opt for the candidate with extensive credentials in the subject to be covered, or should they opt instead
for the candidate who lacks some or all knowledge of the subject but is a highly experienced researcher and exquisite writer?
In the case of the IRO position, it would be great, of course,
if the IRO candidate had experience not only in finance and the securities industry but also in marketing or communications.
There probably aren't, however, many of those individuals in the job market. Also, companies should be on the look-out
for IRO candidates who-while lacking formal financial credentials such as an MBA degree, Street experience, etc.-nevertheless
have an extensive IR track record. It is not impossible, after all, for a communicator, attorney or other smart, focused
executive to have learned the technical skills needed for the IRO position. And not every IRO position need be a stepping
stone to the CFO job. You can find my response posted on the publication's
web site: Inside Investor Relations .
-- Jeff Bogart
Social Media Releases Continue a Long-time Trend
My previous posting noted that the term "news release" is not an apt synonym
for "social media release. Here's another insight about social media releases: they are a continuation of
a long-standing trend in corporate relations--communicating directly with the end audience instead of through a reporter and
the reporter's newspaper, broadcast or cable outlet. Exemplifying the trend is the distribution of financial news
releases written for professional investors such as security analysts and fund managers and distributed directly to them rather
relying on business journalists to report the news. In other words, social media releases, although useable by
journalists, continue the disintermediation of traditional mainstream media that began as early as the mid 1900s.
-- Jeff Bogart