Two teams, many audiences, the same message

SPECIAL REPORT ON INVESTOR RELATIONS AND CORPORATE COMMUNICATIONS: One size never fits all. But when it comes to to the parallel practices of corporate communications and investor relations, coordination has never been as critical
By Celia Milne

If you think of the way your company manages corporate communications and investor relations, does the following anonymous account sound familiar?

I am director of corporate communications and manage a corporate marketing communications group. We do product advertising for the company and develop the marketing material for the individual product lines. We handle the website, all press releases (including financials), media relations, the annual report, the AGM, branding exercises and corporate fact sheets.

My team has very little direct interaction with investor relations. I report to the vice-president of marketing and investor relations reports to the CFO. IR handles all shareholder relations, IR road shows and share analysis. The IR team uses the corporate presentation as the basis for the IR PowerPoint, but rarely tells us what they think should be in it.

Contrast that with the structure that was put in place last year at Nordion Inc. (TSX:NDN) of Ottawa. A former business unit of the beleaguered biotech conglomerate MDS Inc., Nordion was spun off in 2009 and, in 2010, transformed itself into a standalone provider of medical isotopes, targeted therapies and sterilization technologies. In the process, Nordion had a blank-slate opportunity to take possession of its communications and IR functions and create a system that would best serve it as a renamed, repositioned and relisted entity. “It was an unusual process, almost backwards of a merger,” says Tamra Benjamin, the company’s vice-president of public and government relations, describing the company’s divestiture and relisting. “It was a great learning process.”

Among the lessons learned, Benjamin told Listed, was how vital it is for corporate communications and investor relations to be integrated and understand each other’s audiences. “Any corporate communications that go out externally, IR has to be in the process,” says Benjamin. “As a public company, we have a responsibility to be as transparent to our stakeholders as possible while exemplifying good corporate governance, adhering to disclosure requirements and managing our position in the marketplace. Collaborating with IR can only enhance that transparency by creating a balanced message that provides value across a varied stakeholder base.”

Which scenario sounds more like your own? Which one would you want to have? The fact is, either one might work for your company. But when Listed magazine sat down with top practitioners in the two disciplines—for some, IR and corporate communications are on one continuum, while for others they’re forever running parallel, together but apart—we heard a strong call for strategic integration of all communications. It doesn’t matter if it’s road show presentations to investors, media relations, the website, tweets, the annual report, the AGM, branding exercises, new product rollouts or financial filings, it’s all part of the company’s story. And if your communicators aren’t sharing information every step of the way, the wrong story, different stories or no story at all, might get out.

It’s not about where everything is on the org chart. Even though Nordion’s IR and corporate communications are separate departments, they have nothing else in common with the first company at the outset. “Structure is not as critical as the way you prepare internally to communicate with external groups,” Benjamin says. Others we talked to agree.


“Things used to be more siloed and the trend is they are coming together,” says Chaya Cooperberg, vice-president of IR and corporate communications at waste management company IESI-BFC Ltd. (TSX:BIN) in Vaughan, Ont. “It’s about coordinating communications functions so they are consistent across external markets, media, investors, analysts, and the communities we operate in.”

Who tells the story and how depends on the size of the company and the industry in which it operates. Small companies may farm out the IR function, and perhaps have one communications person on staff, explains Cooperberg. With growth comes the necessity of both IR and communications staff. “There is a market cap sweet spot when they should come under the same banner, reporting to the same executive. What is the natural tipping point? It is between the $1-billion and $5-billion market cap zone,” she says. At that point, the company begins to fit the investment profiles of more investors, has more analysts following it, and is garnering additional media coverage. “That’s when it’s important to have an integrated message,” says Cooperberg.

Further along this continuum, she says, the two functions may become separate again, but ideally go through the same filter. “With large and mega caps—$5 billion to $10 billion—they often become siloed again because they are such big categories. Banks, for instance, could have 12 people working in IR and 50 or more working in corporate communications. They may all report to the same executive ultimately.”


There are two ways to integrate IR and corporate communications within the corporate structure, explains Tom Enright, president and CEO of the Canadian Investor Relations Institute (CIRI) in Toronto. One is through restructuring, so that all communications people ultimately report to one person. Another is to have separate IR and corporate communications departments with a horizontal relationship, as with Nordion.

Technology can help streamline communications, notes Enright. CIRI offers its members standard guidelines for disclosure. “It’s not just a desire to integrate communications, it’s the mechanics that can make it a much more efficient and beneficial process.”

As Cooperberg’s title indicates, IR and corporate communications staff all report to her. IESI-BFC is the third largest waste firm in North America. The company has $1.8 billion in revenue and, as of April, market capitalization close to $3 billion. With an employee base of 6,500 people, it operates in more than 100 markets across North America and has 15 analysts covering it. “Everyone has to be on the same page, including the waste collectors,” says Cooperberg. “At the end of the day the story you are telling about the company isn’t changing. You are highlighting for each audience what the company is doing for them. You’re tweaking slightly for each audience’s interest. Analysts who are savvy are getting into consumer messages. You get investors who are consumers and consumers who are investors. You get media who are just as likely to read through financial filings as go to the website.”


Angela McMonagle is a seasoned investor relations executive in Toronto with experience in technology, financial services and mining. She recently joined Canadian Tire Corp. Ltd. (TSX:CTC) as the vice-president of investor relations. McMonagle believes the economic downturn and the speed of information have highlighted the need for companies to have corporate communications and IR departments work together. “In the last five years, I’d venture to say companies benefit from having a tight connection between the two so they are in a position to deal with the issues that arise quickly and efficiently,” she says. “Given the increasingly global business environment, information arises in the marketplace quickly and from a range of sources. Companies often need to be able to respond promptly and in a coordinated way across many stakeholder groups—customers, investors, the media and employees. This is an example of where coordination of investor relations and corporate communications is critical.”

Also, while IR tends to be concerned with regulations and compliance, rules for disclosure and anything that can affect stock price, it benefits from knowing what other company activities or events are planned, for example speeches by the CEO or a product launch. It may not be ideal if the quarterly financial report is saying ‘we missed the mark’ while the communications team is doing an upbeat product launch. On the communications side, no one should distribute information without considering the investment community perspective. “When corporate communications is planning what to say to the Toronto Sun, we need them to think of the investor audience too.”


The constant sharing of information between corporate communications and IR pays off in the smooth running of large events. Nordion’s Benjamin led Listed through a sequence of announcements that the company made in March to convey information that TheraSphere, a patented product to treat inoperable liver cancer, had completed phase II testing and was entering two phase III clinical trials.

“We have various structured and casual ways of sharing information between the corporate communications people and IR,” says Benjamin. Formal sharing takes place through the disclosure committee, where both departments sit in; they also share the event calendar and press release calendar between the groups. Both attend product meetings. “We outline who owns each release,” says Benjamin. “For example, financial reporting is an IR-owned activity while a customer contract would be a corporate communications-owned activity.”

For larger projects, Nordion pulls together what it calls a “run of play.” This lists the objectives of the project, as well as providing a detailed account of what documents and activities need to be completed in order to implement the event or announcement. For the clinical trial announcements, the “run of play” included: the alignment of press releases with a key trade show conference; the release of information to trade publications, media, as well as medical and investor communities; a press conference at the trade show to share phase II clinical trial results; a briefing note for investors and the medical community; coordination of subject matter experts; conducting media interviews; sharing of audience reactions between corp comms and IR, and shared reporting on results of all this.

Casual contact—quick phone calls and hallway conversations—can also be hugely valuable. “I cannot stress enough the importance of regular conversations between corp comms and IR,” says Benjamin. “Just this week I had a conversation with Ana [Raman, director of IR] and during that conversation new information came up that I had not shared previously. Does that mean the process does not work? No, it only means that for all the best laid plans and processes, there are going to be items that both parties miss sharing that may only be captured through an information conversation.

“Sometimes it’s a question of picking up the phone and saying, ‘In two months we’re heading off to do this, let’s put it in our calendar.’ Or, I have staff meeting and I ask, ‘Did you talk to IR? Are they in the loop?’ ”


What are the signs that your IR and corporate communications departments aren’t linked closely enough? “How painful is it to get an announcement out?” asks McMonagle. An example of dysfunction would be a press release that goes out without financials.“If you are going through many gyrations, maybe there is an organizational challenge. You need a cohesive team and a well-established process,” she says.

It is, of course, during crises that weak communications processes stand out, says Anne Lachance, senior vice-president and senior partner at international communications company Fleishman-Hillard Canada Inc.

A company hit with an environmental disaster is a perfect example.“One side is saying,‘We’re going to be good corporate citizens and pay for the clean-up, don’t worry.’ The other side is saying, ‘Your dividends are safe.’ It is two different messages.”

There is perhaps no more dramatic example than what happened after the Fukushima nuclear power plant in Japan was hit by the devastating earthquake and tsunami on March 11, prompting the world’s worst nuclear disaster since Chernobyl.

The eyes of the world were on the plant. Shares of operator Tokyo Electric Power Co. (TEPCO) fell almost 80%, reducing market cap from 3.5 trillion yen the day before the disaster to 750 billion afterwards.Yet what was on Tepco’s website in early April, almost a month after the earthquake? Condolences,apologies and some foot-in-the-mouth messaging: “The Tepco Group’s basic mission is to deliver electricity to society in a safe and stable manner,” declared the tag for the 2010 Sustainability Report even as radioactive water was still flowing out of the plant and into the sea. Coupled with that, the company was grudgingly slow to release information about the crisis to the public. No wonder a blogger at called Tepco’s crisis communications “deeply flawed—the PR equivalent of a meltdown,” while a story on The Financial Times’ site said the company’s communications have “looked more like the Keystone Kops than is desirable in an organization struggling to prevent a nuclear meltdown.”

Admittedly, the Tepco example is rife with hyperbole. But still, it might give senior executives pause to wonder: What if something went wrong? Are our investor relations and corporate communications people working together? Are we maximizing our potential? Do we communicate well day-to-day? Have we prepared for the worst?

“You need to have a plan that is well-established ahead of time,” says Fleishman-Hillard’s Lachance. “It’s a process you work through. You tick all the boxes. You say,‘The first call is to X.’”

Crisis planning should take into account all audiences, including the investment community, she adds. “You need to be quick where people are forming their own opinions. If you have a crisis, the first communication might not be IR. But IR should be part of it; often it is not.”

Lack of a clear strategy can be magnified when a company is announcing layoffs, says CIRI’s Enright. On the one hand, staff and consumers are upset about news of layoffs. On the other hand, the business media and the investing side are thinking they’ll improve the bottom line. “That’s where the importance of an integrated strategy comes in. They need to communicate that so that it does not seem like two different stories,” says Enright. “In a crisis, everything you say is going to be analyzed. If you don’t have your act together, there is not time to plan it.”


Reliable vibes emanating on a regular basis from the company provide insurance in challenging times.“Corporate communications manages the reputation of the company; IR focuses on the financial valuation. Reputation affects valuation. Why do some companies recover faster from a crisis? They have a better reputation,” says Lachance.

It is not always easy to communicate a company’s message to astute and diverse stakeholders. But whether you are disclosing financial results or tweeting about a sale, there’s a bigger risk in keeping IR and corporate communications siloed than there is in sharing expertise and information. Plus with silos, your company’s not just more vulnerable to oversights or miscommunication; you might also be missing opportunities.

Having an integrated strategy, working collaboratively, developing clear, consistent messages and making sure staff understand all stakeholders are the keys to building trustworthy communications and doing right by your valuation.


Don’t hold back

Five rules for communicating through a transition

In a final fell swoop, at the end of 2010, Nordion Inc. (previously MDS Nordion) became a standalone public company. Corporate communications and investor relations, which were previously managed at MDS Inc. headquarters in Toronto, now became Nordion’s concerns in Ottawa. Tamra Benjamin, the company’s vice-president of public and government relations, speaks of five lessons learned that apply to any major transformation:

Integration is key: Integrate IR and corp comms into any external communication that takes place. For Nordion, this included updating standard communication operating procedures to include IR, adding IR to review and approval processes and including IR in the daily routine of communication activity. “It needs to become part of the fabric of your business,” says Benjamin.

Work collaboratively: Never underestimate the importance of the information you are about to share to other stakeholders outside your area of responsibility. Include IR and corp comms at the front end of any external communication activity. In addition, marketing, sales, R&D and other functional areas end up being the subject matter experts on many topics. Work effectively to get their input on the subject and support on the messaging.

Understand your stakeholders: It is important to have IR and corp comms understand what matters to each other’s stakeholders. “We actually set up meetings with IR and communications to go over our investor base and get an understanding of what our IR person manages on a daily basis and what the investor expectations tend to be,” says Benjamin.

Balance the interests of different parties: Do not be afraid to have an internal debate about communications. “We have a responsibility to be as transparent to our stakeholders as possible while exemplifying good corporate governance and simultaneously adhering to disclosure requirements and also protecting our competitive position. This is not always easy and agreeing on what is appropriate to be shared requires that discussion,” says Benjamin.

Be strategic and consistent: Decisions are made and conclusions drawn from the information you share with your stakeholders. “Messaging needs to be consistent with information that is clear and concise, whether the message is around financial results, overall strategy or business milestones. Align your messaging with your business strategy.”

Celia Milne is a freelance writer in Toronto.

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