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Turning IR Into a Competitive Advantage

Institutional and retail investors’ expectations for proactive communications presents companies with the opportunity to turn IR into a competitive advantage.

For any company to achieve sustained, rapid growth, top-notch IR needs to play a central role in the development strategy. No one knows this better than TD’s head of direct channels, technology, marketing and real estate Colleen Johnston, who served as the bank’s CFO for almost a decade.

As Bloomberg recounts, Johnston helped turn her IR team into an award-winning program in just five years, helping TD solidify its status as one of the strongest performing banks in the world, even during the financial crisis. Such tremendous success can be attributed to the bank’s concerted efforts to turn IR into a competitive advantage.

Commitment

After identifying the need for an IR department, Johnston and then-CEO Ed Clark “knew that we needed to deepen the demand for our shares,” Johnston says, “and we undertook to raise the bar in every single way.” For TD, this meant bolstering the bank’s already investor-centric philosophy with a renewed dedication and modernized systems of operations.

“It requires lot of a commitment at the senior executive level at the CEO and CFO, but our whole organization is very investor-focused,” she tells Bloomberg. When an investor has a question, “people drop everything” to answer it.

This dedication is a hallmark of great customer service in any industry, and is especially important for IR programs. “We really looked at every aspect of what we did and tried to make it as modern as possible,” continues Johnston, “but a lot of it really is about [our] philosophy around accessibility, transparency, adding value to your investors.” Carving out your own IR team’s philosophical base gives you a strong foundation on which to build your program.

Two-Way Street

But ideology alone isn’t enough — IR ultimately comes down to execution, and as with any partnership, honest and open communication is key. Without feedback from your shareholders, for example, you simply will not grow and improve, and it is up to your team to actively encourage such communication. “It really is a two-way street,” says Johnston, “and when we meet with investors and analysts we’re always looking for their views on TD… We really listen, and believe me, at our senior executive team meetings, the voice of the investors is always at the table.”

How you communicate with others is equally important, and finding the right tone is critical. “You want to be very fair and transparent,” she says, “[and] there are always challenges out there but you don’t want to go overboard in terms of all of the challenges and the wall of worry.” Work hard to strike a balance between promotion and warning, positivity and mitigation.

Cutting Costs

Facilitating that communication in cost-effective and time-efficient ways can certainly be a challenge; however, emerging technologies are helping IR professionals reach their shareholders with less effort than ever before. For TD, high-end videoconferencing is proving particularly effective, and improving mobile technologies means you can stay in touch: anytime, anywhere.

It also means you can do more with fewer people, saving your company valuable time and money. “You want to make sure you’re using the capacity of your organization wisely,” Johnston advises, “so you don’t unnecessarily tap into its resources.”