How to integrate IR with corporate communications
Where in the world do your investors come from?
ARCADIS is in something of a special situation, as a little more than 19 percent of our stock is held by the Lovinklaan Foundation, which represents the staff, and close to 5 percent is held by the KNHM Foundation, which is the founding father of the firm. These are both Dutch institutions, but not professional holders.
Corrected for these Dutch owners, our international ownership is large, with only 21 percent of shares in the hands of identified institutional holders from the Netherlands. The remainder is with investors in other European countries and/or North American investors. A portion of our investor base sits with unidentified holders, including retail shareholders from an unidentified geographic region.
How are investor relations and corporate communications structured at your company?
IR resides within the corporate communications department, but works closely with the CEO and CFO in developing the IR strategy and direction. We believe coordination with corporate communications is important to ensure the company complies with stock exchange regulations and addresses its different audiences consistently. In order to ensure this happens smoothly, corporate communications reports directly to the CEO.
Who else do you work with?
I work with an assistant, Marjorie O’Connell, who is partly dedicated to investor relations, but also does corporate communications work. In addition to working closely with the communications staff, we keep in regular touch with colleagues from the legal department and are in daily contact with the people in our finance department.
Of course, we keep up with developments in the operating firms by keeping in touch with local management teams, too. Overall, I estimate the capacity dedicated to IR to be around 1.4 full-time employees.
Are you in regular contact with the financial media?
Yes, I speak with financial journalists regularly. Not only following annual or quarterly reports or surrounding important press releases but also in between, in reaction to important market or company developments, or peer movements. We organize press trips for financial media in order to provide background to projects or markets we are developing strategic positions in; my colleagues Mark Zellenrath and Tim Preger are mostly driving that effort.
We also work hard to facilitate dialogue between management and key media contacts, a good example being a recent interview of our CEO with Dow Jones.
How long have you worked in investor relations?
My first exposure to IR was when I worked with Dutch chemical and paint giant Akzo in New York, where we sometimes supported the Dutch IR department in organizing meetings with US investors and analysts as far back as 1990. In 1995 I joined ARCADIS in a position initially dedicated to IR but latterly also including the corporate communications responsibilities. I reverted to an IR focus in 2007 due to the company’s considerable growth in recent years.
How would you describe your employment background?
I started out as an internal communications manager, adding public relations and corporate communications responsibilities early on in my career. The step to investor relations was mainly a result of my knowledge of the US financial markets, which I gained during my stay in New York and Chicago on behalf of Akzo. This fit well with the fact that ARCADIS at the time had a NASDAQ quotation and needed to focus on US investors.
Why do you think Dutch companies do so well when it comes to international IR awards, such as the IR Magazine Awards and the Thomson Extel Awards?
Even though the Dutch financial market has several sizeable institutional investors, their focus is very international. The automatic consequence is that the local target market for IR is limited, requiring a strong bias toward international markets from IROs.
In addition, I think NEVIR – our local IR association – plays a strong role in the success of Dutch companies. It promotes best practice in IR and organizes quite a number of events where IR people can exchange experiences. The atmosphere is open, constructive and educational, which really helps in developing the IR function at different companies.
Do you think social media have a role for investor relations professionals?
It is definitely something we keep a keen eye on. For the exchange of information between IR professionals, social media are a very helpful tool. For contacts with investors and analysts, they could work well, provided you can avoid the pitfalls related to selective disclosure. I still think personal contact and phone calls are the strongest tools for smaller companies with limited target groups.
Finally, what would be your key piece of advice for IR professionals when dealing with the financial media?
Don’t be pushy. Make sure you provide relevant information that puts the decision-making process at your organization into the right perspective. Make an effort to understand the role and point of view of the media when addressing questions, without losing sight of your own interests. Finally – and most importantly – be as transparent as possible.