The traditional day to day tasks of the IRO have been fundamentally transformed in this new regulatory environment where all messages and communication must be made public.  Gone are the days when the daily chat to update company news with the “best friend” analyst was the practice for most IROs.  Selective communication across all outlets, media and private, is no longer allowed. 

So what value does the IRO bring to the table?  What do you really need after the IPO euphoria has passed?  The company message has been crafted with the Investment Bankers and is probably good for a couple of months following the listing.  It is then time to turn to an experienced IRO, not that junior associate the big IR firm has most likely assigned to your account.

Here is what to look for in choosing an IRO:

·       judgment to position the company positively but not to establish unrealistic expectations with potential to damage credibility;

·       crafting messages with the understanding of what analysts are thinking and expecting;

·       maturity to interact with management, obtain consensus, and look out for long-term company interests;

·       choosing correct language to convey future performance, positioning it correctly, and insight when to best use it;

·       ability to write concisely, compile all thoughts, and efficiently produce an earnings release, company news, investor presentation, and other written collateral.

Outsourcing provides an objectivity that is often difficult for an internal employee to exercise.  It also allows you to have a senior person for significantly less than the cost of a full time experienced IRO. Whether your investor relations is conducted internally or outsourced with a trusted partner, it is a strategic position that is essential to the fair valuation of the company’s stock price.