What makes someone or something authentic? It’s clearly a question many people have been wrestling with, as Merriam-Webster, the US’ oldest dictionary, recently announced ‘authentic’ as its word of the year for 2023.
‘A high-volume lookup most years, authentic saw a substantial increase in 2023, driven by stories and conversations about artificial intelligence (AI), celebrity culture, identity and social media,’ writes the publisher in a blog post.
As Merriam-Webster points out, there is no clear definition of the word – which is one of the reasons it causes debate. Meanings include ‘real’, ‘not false’ and ‘true to one’s own personality, spirit or character’.
If we had to choose a word of the year for IR, authentic would be an excellent candidate. Over the last 12 months, companies have had to tread carefully to avoid the risk of being labeled phony or superficial.
The aforementioned AI is a central reason. From an external perspective, the world is becoming ever-more flooded with fake information. Much of it is harmless fun – like images of the ‘Balenciaga Pope’ in a huge white puffer jacket – though it also has the potential to mislead investors, clients and customers.
But the bigger dangers come from within. As we undoubtedly rely more on technology to automate tasks and create content, companies may appear inauthentic. If it turned out your CEO’s heartfelt LinkedIn post was whipped up in five seconds by ChatGPT, how would that land?
That’s not to say IR teams should avoid new technologies – far from it. The opportunities are huge to save time and make better decisions. By and large, however, people respond better when they feel they are really getting to know you and your company.
New data on IR activity drives this home. During 2023, the number of in-person investor meetings more than doubled on the previous year, according to IR Magazine’s Global Practice Report. Getting back to face-to-face meetings, rather than just catching up via a screen, has been a priority for both companies and investors.
Another area where authenticity has been in the spotlight is sustainability. Investors have pushed companies to move from explaining their strategy to showing its implementation. They want less description, more data.
Some companies have been accused of greenhushing, where you tone down your ESG commitments to avoid scrutiny. Certainly companies shouldn’t hide from their environmental obligations. But you could argue that some drawing back is welcome, if it means exaggerated claims are being replaced with realistic objectives.
Of course, authenticity has always been key to successful IR. Investors and analysts value open and honest dialogue, where the bad is discussed as well as the good. For individual IROs, making the case for such transparency often means going against the views of others in the organization. With risks to authenticity mounting, IR teams will be central to maintaining this important trait.