Communication is at the heart of Investor Relations, yet a background in this discipline hasn’t always been a top priority. But that may be changing.
In a curated study of senior Communications and Investor Relations executives at 33 companies with a market capitalization of $10-20 billion, we found that 53% of Communications executives have only communications experience. We observed an increasing number of communications executives have early foundations in Investor Relations. “The increased need for Investor Relations leaders to communicate the company strategy, and why it is best suited to enhance long-term value creation and competitive advantage, has led companies to seek these skill sets from the communications leaders,” one IR leader shared.
Our research showed, 38% of IR leaders studied solely had investor relations experience. In these instances, there is often a corporate affairs team to support the communications needs while the IR leader brings deep financial acumen to the team. These collaborations are broadening IR executive career growth opportunities. While many IR executives aspire to become CFOs, these increasing collaborations between IR and communications have formed a trend of IR talent transitioning toward communications roles. “Typically, when the individual comes from an Investor Relations background, they have had the opportunity to demonstrate to the CEO or executives that they have a broader skillset or because the company has faced major shareholder challenges resulting in communications being focused on the investor community,” an Investor Relations executive explained.
You might naturally think that a head of investor relations who has both communications experience and IR experience would be the Holy Grail, but only 9% of executives in our study possessed both. “The transition into a dual-focused role has not been an organic career path but a result of business needs or individual preferences to take on added responsibilities,” explained a senior IR executive. Although a dual-focused role has become more common in certain industries. We have seen Financial Services, Pharmaceuticals and Biotech companies leading the way.
While there are strong benefits to this hybrid communications/investor relations experience, it is clear that there would need to be development opportunities for IR leaders to broaden their expertise. For leaders with an IR background, they may benefit from further developing their communication skills, both internally and externally to better serve the business.
The success of this evolving role will also hinge on the IR leader bridging any gaps between Corporate Affairs and Investor Relations. Challenges can arise when each of these teams shares pieces of developing the company’s narrative but there isn’t cohesive leadership across the teams. “Both functions have been agnostic as to whom to leverage for active communication outcomes to investors, consumers and employees, resulting in the lines of responsibility becoming blurred,” one leader explained. Ensuring open lines of communication between these teams and helping them to align on shared goals will be a key focus for this dual-team leader.
Finding the Right IR Fit for Your Company
Ultimately, the decision on who should lead your Investor Relations function depends on the specific needs of your organization, the existing skill sets within your team, and the unique challenges you face in communicating with investors. Balancing these elements will be key to selecting a leader who can drive your investor relations strategy forward in a dynamic and competitive market.
