Corporate Communications and IR Friends, foes or frenemies?

Transcription

1 Corporate Communications and IR Friends, foes or frenemies? John Gilardi DIRK Conference / June 2015 Corporate Communications and IR Friends, foes or frenemies? 1

2 Thank you to bosses, mentors and colleagues who shaped my perspectives. Paul Argenti Dartmouth Nancy Hobor Northwestern Matthias Hensel BASF Friedmar Nusch Aventis Arvind Sood Amgen Carsten Tilger Henkel Karl Mahler Roche Ann Bailey Novartis Bob Pearson W2O Felix Gress Continental Corporate Communications and IR Friends, foes or frenemies? 2

3 My dad gave me some very important career advice: Miles Law. Corporate Communications and IR Friends, foes or frenemies? 3

4 "Where you stand depends on where you sit. It explains why people take certain views based on their role in a situation. Corporate Communications and IR Friends, foes or frenemies? 4

5 So in a corporate setting, many roles are represented at the table. The customer is king. Regulators make the rules. Corporate Communications and IR Friends, foes or frenemies? 5

6 Other stakeholders include journalists, NGOs, auditors, consultants, etc. Corporate Communications and IR Friends, foes or frenemies? 6

7 Shareholders obviously have a big seat at the table. But don t forget sell-side analysts, credit agencies and debt investors. Corporate Communications and IR Friends, foes or frenemies? 7

8 The CEO has the top internal seat, and other functions are also represented. Corporate Communications and IR Friends, foes or frenemies? 8

9 Investor Relations also wants a seat at the table. So strategic and vital! Corporate Communications and IR Friends, foes or frenemies? 9

10 So does Communications. But can both be strategic and have a big seat? My view: The stakeholder roles are too fragmented but together they are. Corporate Communications and IR Friends, foes or frenemies? 10

11 Many companies still have separate teams, seek alignment and collaboration. Success comes comes down to the people not structures and rules. Corporate Communications and IR Friends, foes or frenemies? 11

12 Far too often the team collaboration" efforts feel like this. Corporate Communications and IR Friends, foes or frenemies? 12

13 The new trend is integrated teams regardless of size to capture synergies. Bundle your strengths to engage stakeholders in harmony. Corporate Communications and IR Friends, foes or frenemies? 13

14 A new trend? No. We are going full circle back to the old style of fully integrated teams. Corporate Communications and IR Friends, foes or frenemies? 14

15 Why? The turf wars are tiring. Rivalry reduces all of our credibility at the table. Image source: Manu Cornet, Corporate Communications and IR Friends, foes or frenemies? 15

16 My call to action: Get prepared for integrated teams informal or formal. Take the first step. Learn other Communications roles. Do it for your career. Corporate Communications and IR Friends, foes or frenemies? 16

17 Let s review three reasons to take action. Corporate Communications and IR Friends, foes or frenemies? 17

18 Reason Nr. 1 is speed: News travels much faster than a One Voice Policy. Corporate Communications and IR Friends, foes or frenemies? 18

19 Success in aligning IR and Corporate Communications in pre-internet Corporate Communications and IR Friends, foes or frenemies? 19

20 The rationale: Reduce reputational risks in a fast-changing media landscape. Corporate Communications and IR Friends, foes or frenemies? 20

21 Fact Gathering Stage Fact Checking Initial Conclusion Testing Decision CORP COMMS Media Is there a story? What is the angle? Explore sources Check opposition Story appears to be Am I being told the truth? Correct? Or false? Story Sell-side analysts Has something changed? Can I get more information? Impact on stock price How can I make my clients understand? Report Recommend IR TEAM Buy-side audience Is there value? Previous opinions Is it worth the effort? Should I take another look at it? How does this rate vs. other key investment Invest? Now Tomorrow Never External target groups were talking to each other so we needed one story. Corporate Communications and IR Friends, foes or frenemies? 21

22 Now the external discussions are taking place in ways we never imagined. Lacking complete alignment is a recipe for disaster. Corporate Communications and IR Friends, foes or frenemies? 22

23 Anyone can share their views with everyone in ways we never imagined. How are you prepared to work with Communications? Corporate Communications and IR Friends, foes or frenemies? 23

24 Case study: Quest Diagnostics and a tweet. Corporate Communications and IR Friends, foes or frenemies? 24

25 Case study: Quest Diagnostics and a tweet. Corporate Communications and IR Friends, foes or frenemies? 25

26 Case study: Quest Diagnostics and a tweet. Corporate Communications and IR Friends, foes or frenemies? 26

27 Reason Nr. 2 is engagement: Your investors talk to their stakeholders. Corporate Communications and IR Friends, foes or frenemies? 27

28 Stock price = Performance + Perception Let s go back to the IR basics. Corporate Communications and IR Friends, foes or frenemies? 28

29 Liquidity Dividend yield Sector attractiveness Sales trends Balance sheet strength EPS growth Beta Cash flow Share float Return on invested capital Performance-related variables are the bread and butter of IR discussions. Corporate Communications and IR Friends, foes or frenemies? 29

30 Regulatory risks Management quality Baruch Lev Sustainability 35% of valuation comes from non-financial factors Customer satisfaction But non-financial factors are a growing part of valuations. The challenge: These topics are often handled directly by Communications. Bess Gallanis / University of Chicago Corporate Communications and IR Friends, foes or frenemies? 30

31 Customers Shareholders Employees Financial analysts Your company logo here! Unions Government NGOs Impact on society Local communities It is so easy today for shareholders to engage with others and without you. Corporate Communications and IR Friends, foes or frenemies? 31

32 Stakeholder discussions occur in a dizzying range of digital channels. Corporate Communications and IR Friends, foes or frenemies? 32

33 Disclosure rules are changing in ways we never imagined. It is one permanent and truly global news cycle info is either public or not. Corporate Communications and IR Friends, foes or frenemies? 33

34 One approach: Align core messaging around the corporate brand. The challenge: This is bread and butter work for Communications teams. Corporate Communications and IR Friends, foes or frenemies? 34

35 Case study: QIAGEN. Corporate Communications and IR Friends, foes or frenemies? 35

36 Case study: QIAGEN. Corporate Communications and IR Friends, foes or frenemies? 36

37 Current Double blue bars Red line + blue bars Red line + bottom line Open space Case study: QIAGEN. Corporate Communications and IR Friends, foes or frenemies? 37

38 Case study: QIAGEN. Corporate Communications and IR Friends, foes or frenemies? 38

39 Case study: QIAGEN. Corporate Communications and IR Friends, foes or frenemies? 39

40 Case study: QIAGEN. Corporate Communications and IR Friends, foes or frenemies? 40

41 Case study: QIAGEN. Corporate Communications and IR Friends, foes or frenemies? 41

42 Reason Nr. 3 is your future. The Head of IR seat at the table may disappear. Corporate Communications and IR Friends, foes or frenemies? 42

43 Quiz: In 1984, how many Fortune 500 companies had their own IR department? And today? Louis M. Thompson, Jr. NIRI President ( ) Lou Thompson has seen it all. He is an advocate of integrated teams. Make that returning to integrated teams! Samantha Wheeler / University of Southern California Corporate Communications and IR Friends, foes or frenemies? 43

44 If this is the speed at which our stakeholders are getting information Corporate Communications and IR Friends, foes or frenemies? 44

45 and are communicating with each other in ways never imagined Corporate Communications and IR Friends, foes or frenemies? 45

46 why are many companies still working with outdated corporate structures? Cartoon by BusinessGoesSocial.net Corporate Communications and IR Friends, foes or frenemies? 46

47 Public Relations Investor Relations Advertising Internal Communication How a company communicates Social Media Crisis Communication Corporate Identity Marketing Let s face the facts: IR is just one type of communication among many. The environment demands more than collaboration it means integration. Corporate Communications and IR Friends, foes or frenemies? 47

48 Different approaches to organizational design: Only IR really matters. Corporate Communications and IR Friends, foes or frenemies? 48

49 Different approaches to organizational design: Partners in other functions. Corporate Communications and IR Friends, foes or frenemies? 49

50 Different approaches to organizational design: Splitting up stakeholders. Corporate Communications and IR Friends, foes or frenemies? 50

51 Different approaches to organizational design: One team to all stakeholders. Corporate Communications and IR Friends, foes or frenemies? 51

52 Many German IROs are already part of integrated teams and it will increase. Corporate Communications and IR Friends, foes or frenemies? 52

53 Think bigger than just Head of IR. Why not lead an integrated team? My prediction: Head of IR role gone as CEO/CFO-direct report in 10 years. Corporate Communications and IR Friends, foes or frenemies? 53

54 My summary: Make friends not enemies with Communications. Capture benefits for your company while improving your career opportunities. Corporate Communications and IR Friends, foes or frenemies? 54