Investor Relations Role Grows More Valuable
Lavoie, Denise, THE JOURNAL RECORD
STAMFORD, Conn. -- As companies report their latest quarterly earnings this month, the gift of gab is just not cutting it anymore.
Companies used to let PR people tell their stories to Wall Street. But as investors become more sophisticated, companies are finding they need employees who can deal with them on an equal footing: Investor relations professionals.
Put another way, blarney may be good -- but financial training is better. Responding to the demand for more specialized corporate communicators, the University of Connecticut recently offered its first course on investor relations at its campus in Stamford, home to such corporate giants as Xerox, Pitney Bowes and Champion International. The 10-session certificate program covered everything from how investors price a firm's stock to the legal requirements for disclosure. "You're dealing with institutional investors who own large blocks of stock through mutual funds and money managers, and they have a great deal of savvy," said Charles Wessendorf, manager of investor relations for Xerox. "If you don't have the credibility to deal with these people, that reflects badly on the company," he said. UConn joined about a half dozen universities offering certificate programs or graduate courses in investor relations, including Bentley College in Waltham, Mass.; Fairleigh Dickinson, in Madison, N.J.; and the University of California at Irvine. Investor relations, or IR as it is known in corporate-speak, has been a corporate function for years, but it is only over the last decade or so that is has come into its own as a profession. Companies used to have their public relations or communications staff handle the investor relations function. But today, most companies have at least one full-time IR person, and some have entire departments devoted to communicating with investors. Investor relations specialists, who once merely had to be articulate, today increasingly hold MBAs or at least have a strong background in finance. Most report directly to the company's chief financial officer and act as the primary company spokesperson to investors and the news media during all-important earnings seasons. "This really came about when the market in the mid- to late-'80s became institutionalized," said Louis M. Thompson, president and chief executive officer of the National Investor Relations Institute, a professional association based in Vienna, Va. …