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Shifting Sands: How to Keep Pace With an Ever-Changing IR Landscape

The global financial crisis drastically reshaped the Investor Relations landscape. IROs today encompass a much broader range of responsibilities, including maintaining the stability of their company’s valuation.

During the past nine years, the responsibility of the modern IRO has changed dramatically. Traditionally, IROs were responsible for facilitating communication between analysts and investors: namely, disclosing crucial information that might dictate strategic action and investment decisions. Today, IROs have a much more expansive list of responsibilities, making them a key player when it comes to maintaining a company’s financial stability in the somewhat turbulent global market.

The Changing Role of the IRO

Modern IROs are responsible for developing viable analyses, supervising and adhering to regulatory standards, and engaging in strategic planning. Before the financial crash, IROs typically came from a PR background and acted as an intermediary between CEOs, Board Members, and investors. Now that this role has evolved to include farther-reaching responsibilities within the company, IROs are more likely to come from a financial background that has equipped them with comprehensive knowledge of an organization’s finances. This includes expertise in buy-side or sell-side analytics as well as CPAs of CFAs.

The increased responsibility of IR professionals has come with increased financial compensation. According to a 2014 survey conducted by Korn Ferry International, the base salary and bonuses of corporate IROs has steadily risen from 2010 to 2014. The median salary for IROs has grown from $174,000 in 2012 to $186,000 in 2014, and average cash bonuses have risen from $65,000 in 2012 to $69,000 in 2014. These statistics confirm a correlation in recent years between IROs’ increasingly specialized skillset and their steadily rising compensation.

Plan Effectively

Today’s IROs are working harder than ever, juggling a variety of tasks in order to sustain their organization’s stock value. With this increased responsibility, it is crucial that they develop specific, annual goals for their companies.

Goals for the future should follow the ‘SMART’ model, which states that company objectives should be specific, measurable, achievable, results-focused and time-bound. These goals should be set annually, with the company’s yearly budget and a 12-month strategy in mind. Most importantly: keep these goals manageable. Rather than pursuing myriad disparate objectives, IROs should focus on developing a few criterion-specific goals to make their annual strategy more efficient and effective.

Lastly, don’t be afraid to do research outside of your own company or even industry. Understanding how fellow IROs communicate and execute their company’s annual goals can provide a framework for you to optimize and sustain your own yearly strategy.

IROs Are The Future

As the responsibilities of the traditional IRO continue to expand, it is certainly an exciting time to be a part of the Investor Relations community. IROs are being relied on more than ever before to facilitate effective financial strategy and to keep shareholders satisfied. In order to remain competitive, today’s IRO must remain open to the changing nature of the position, while continuing to refine their skillsets to meet their companies’ needs.