Digital migration for IR teams and their stakeholdersLisa Flanders
Navigating the new landscape
Investor relations (IR) teams play a critical role in communicating with stakeholders, particularly investors, analysts, and shareholders. In our observations the way these teams communicate is evolving at an unprecedented speed, as the demands and expectations of delivering digital content and hybrid events are shifting away from traditional practices.
In this blog post, we will explore some of the changes in IR communication channels, the benefits and risks of these changes, and the importance of compliance with regulations and protection of price-sensitive information.
“The way IR teams communicate with stakeholders is evolving at an unprecedented speed as digital platforms, social media, and hybrid events change the game.”
One of the most significant changes in IR communication channels is the shift towards digital platforms. Collaboration platforms are being used to prepare, and websites, email, and social media are now commonly used to share financial information and reports, allowing for real-time updates and increased accessibility for stakeholders. This shift towards digital platforms has several benefits. First, it allows for greater flexibility and accessibility, as stakeholders can access financial information from anywhere at any time. Secondly, it allows for more efficient communication, as financial information can be shared in real-time, rather than waiting for the next print report. Finally, it allows for greater engagement and interaction, as digital platforms provide opportunities for team internally to collaborate regardless of their location and it gives stakeholders the ability to ask questions and provide feedback.
“Digital platforms provide greater flexibility, efficiency, and engagement for stakeholders, but also bring new challenges for IR teams such as ensuring information security and accuracy.”
However, the use of digital platforms also brings new challenges for IR teams. Ensuring the security of sensitive financial information, maintaining the accuracy and integrity of the information being shared, and complying with regulatory requirements are all critical concerns. Cybersecurity threats are on the rise, and it is essential for IR teams to ensure that financial information shared on digital platforms is protected from unauthorised access, hacking, and other cybersecurity threats.
Additionally, IR teams must ensure that the information shared is accurate and compliant with regulations, as the dissemination of false or misleading information could have severe consequences for the company and its stakeholders. There is also an expectation to provide meaningful data that accurately represents the company’s performance and commitment to sustainability. This includes avoiding the use of “greenwashing” tactics.
“Hybrid events offer the opportunity for personalisation and wider audience engagement but can also incur higher costs and introduce technical issues.”
Another trend we see among IR teams is the use of hybrid events, which combine in-person and virtual components. These events allow for greater engagement with a wider audience, as stakeholders can participate remotely or in-person. Additionally, these events can be recorded and shared on digital platforms, providing even more accessibility for those who could not attend. Hybrid events also offer the opportunity for IR teams to create a more personalised and interactive experience for stakeholders, by allowing them to ask questions and participate in discussions.
However, there are risks associated with hybrid events as well. Firstly, the cost of hosting hybrid events can be higher than traditional in-person events. It is important for IR teams to ensure that the benefits of hosting these events outweigh the costs and are budgeted for accordingly.
Additionally, the use of virtual components in hybrid events can introduce technical issues, such as poor audio or video quality, which can negatively impact the experience for stakeholders. IR teams must also be aware of the regulatory requirements for virtual events, such as ensuring that all stakeholders have equal access to the event, regardless of location or technical capabilities.
“The use of social media in IR communication requires a delicate balance between building brand and avoiding misinformation.”
Another trend is the use of social media to communicate with stakeholders. Platforms such as LinkedIn and Twitter allow companies to share financial news and insights, engage with stakeholders, and build their company’s brand. However, one must be aware of the risks associated with social media communication and ensure that all information shared is accurate and compliant with regulations. Social media can also be a breeding ground for misinformation, and it is essential for to be able to identify and address false or misleading information that may be shared on these platforms.
The increased use of digital channels and hybrid events is not only changing the way IR teams communicate with stakeholders, but also the way stakeholders consume financial information. The ability to access information in real-time and participate in virtual events is making it easier for stakeholders to stay informed and engaged. However, it is important for IR teams to be aware of the risks associated with digital communication (regulatory compliance, miscommunication or misinterpretation of information, reputation risk, cybersecurity, data privacy and conflict of interest) and to take steps to mitigate these risks.
“IR teams are working closer with Marketing and Communications teams to align messaging and drive growth, while also complying with regulatory requirements and protecting sensitive information.”
With all this in mind, understandably there is a growing trend of Investor Relations, Marketing, and Communications teams working together more closely. The lines between these functions have become blurred as the way companies communicate with stakeholders has evolved. This has led to IR teams working more closely with Marketing and Communications teams to ensure that the company’s messaging is consistent and aligned across all channels. Additionally, the data generated from these digital channels can be used to track the effectiveness of IR, Marketing and Communications strategies, and adjust them accordingly. By enhancing the synergy between these teams, it can help companies to better engage with their stakeholders and drive growth.
In summary, Investor relations teams are adopting digital communication channels in preference to traditional practices, to better engage with their shareholders and deliver timely and accurate information. This includes the use of social media, streaming events across multiple touch points, and virtual events to provide updates on company performance and future prospects. Additionally, many companies are also developing mobile apps and other digital tools to provide easy access to information and services for shareholders. These efforts are aimed at catering to the demands and expectations of a more digitally savvy investor base, while also complying with regulatory requirements and maintaining the confidentiality of price-sensitive information.
Bastion assists Investor Relations teams adopt new communication channels by providing expertise and resources in digital communication strategies. This includes creating a plan that incorporates both traditional and digital channels to ensure that all stakeholders are reached effectively.