In the final part of a three-part series focusing on key issues central to the German IR association and its members, Dirk CEO Kay Bommer tells Andrew Holt about the importance of strategic IR
The term ‘strategic IR’ may seem axiomatic – isn’t IR by its very nature and definition strategic? ‘It may be a bit of a misleading label,’ notes Dirk CEO Kay Bommer, considering the point.
Nevertheless, Bommer says there are indeed a number of strategic functions to IR. He cites five key separate parts he has been pushing to his members to see as one whole. First is the marketing function. ‘This is about going out there and explaining the stock,’ he says.
Second is the finance function: ‘This is being transparent about how you do your business.’ Third is the communications function. ‘You are the spokesperson for the company. That is very important,’ says Bommer. Fourth is the legal function.
Alongside these four functions a fifth has emerged for the German IR professional to also consider. ‘I think it is the most important one,’ declares Bommer. ‘It is listening to the market. What are the sentiments out there? It is relaying all that information back into the company and to the management, so it can take all of it into consideration when making decisions.’
This puts a slightly different slant on the work of the modern IRO. ‘This means you are not in competition with internal communications or public relations – you are in competition with strategy, ‘says Bommer. ‘CEOs really need to consider IR as an important stakeholder group when they make new decisions. That is what we are pushing. By calling it strategic IR, you are an adviser to your board: [it becomes] a strategic and integral function.’
In Germany there are only a few IPOs, so the strategic IR focus is often on issues such as M&A. Bommer cites the €24 bn ($26 bn) merger of the London Stock Exchange and Deutsche Börse as an example.
‘The shareholders of both organizations said ‘yes’ to the merger. But if it doesn’t go through it is because of political matters,’ he points out. ‘And IR is the right place to deal with that. IR is more than speaking to investors. You need to look at the big picture.’
Summing up, Bommer notes there has been a shift in the work and approach of IR, which has evolved in Germany in recent years: ‘Strategic IR in the last two to three years has become an operational issue for the majority of IROs.’ In this context, he admits: ‘IR is a still a young profession in Germany.’
Overall, Bommer is pleased with his organization’s work over the last 12 months on the issues covered in these interviews. ‘I would say we have been able to place all these issues in a wider public discussion and reached a level of importance beyond the small world of investor relations.’
