An active Investor Relations (IR) Association or a Society can greatly support healthy development of a country’s or region’s capital market. A listed company’s ability to communicate its investment story in a transparent way and give access to its management team are the two fundamental pillars of IR. For global fund managers, who manage billions of dollars of capital, those two pillars play a key role in their investment decision process. Hence a local IR industry will, over time be closely linked to its ability to attract capital from the global markets, in both equity and debt form.
While the set-up of individuals societies and associations vary from country to country, they broadly aim to achieve the following:
Raise the awareness of the benefits that IR can bring in attracting capital (and reducing its cost)- from both micro (company) and macro (capital market) perspective.
Provide its members a training and professional development programmes to further develop IR skills in line with global best practice.
Represents its member views to regulatory, the investment community and government bodies.
Regularly acknowledge and award best practice IR teams.
Provide a forum for networking for professionals in the industry and provide links to other IR Societies globally.
Setting up such a Society in a new market requires the interest and commitment from the broader capital market as well as dedicated set of resources to build out a value offering for future members. The following steps and questions asked can be useful in the early considerations:
Set the scope of the future Society. Earliest discussions need to specify the exact purpose of the Society, what will it try to achieve in the short, medium and long term. Which out of the 5 value points above is the market lacking the most?
Create a core executive team. Who will be responsible for progressing the agenda of the Society, keeping track of metrics and progress, and act as the public face of the organisation while its being formed? Who else needs to be involved and “buy-in” for the initiative to be successful?
Raise seed capital from founders and early sponsors. The executive team needs to plan initial capital requirements which may include: salary for first General Manager (GM), first operating expenses, marketing collateral including website, first three Society events.
Create a membership offering for corporates and advisors : The GMtogether with the executive team is responsible for creating a value proposition for listed companies and advisors which it then markets in its community.
Organise the first conference and awards ceremony: The first conferences aims to capture the attention of all of its members and addresses key topics and trends in IR, both locally and globally. It invites global experts to share their perspectives through presentations, panels and case studies. An awards ceremony awards best practices in IR (this is best done when conducted through an independent survey, such as Extel).
Year 2: Create a training offering (e.g. 2 day IR training course twice a year). This can be done together with external partners such as UK IR Society, which conducts training for number of other Societies.
Further developments: The Society create committees which involves more members of the community to be part of the Society (e.g. by forming membership, regulatory, events, private company committees). Those committees are responsible for adding depth to the membership offering and further broadening its scope. Separate to the executive team the Society forms its governance and control committee which is responsible for audit, financial affairs, conflicts of interest etc.