The role of the Investor Relations Officer (IRO) has evolved from a traditional liaison between investors and the board of directors to a strategic role that utilizes AI to provide predictive analytics, real-time insights, and personalized experiences for specific investor groups.
This revolution has opened up countless new opportunities, but it has also created more complex challenges. In today’s digital and AI-driven environment, mistakes in IR communication can not only damage a company’s reputation but also spread at unprecedented speeds with unforeseen consequences.
This article analyzes the 10 most common mistakes made by IROs in the AI era and provides practical solutions to help professionals avoid risks and maximize the power of modern technology.
1. Lack of Accessibility
When there are insufficient communication channels for investors to reach the company, they may feel neglected and lose trust in the company’s transparency and reliability.
The solution is to ensure that investors can easily contact the company to ask questions, share concerns, and make suggestions. More importantly, the company needs to demonstrate acknowledgment and provide timely responses. However, it is advisable to consult the CEO to prioritize investors, as the company’s resources are limited.
2. Inconsistent Communication
Outreach to investors should be consistent throughout the year. If communication is intensified only before the general meeting of shareholders, it may create the impression of a “vote-soliciting” effort rather than providing valuable information.
To avoid misunderstandings, maintain regular interactions with investors through online and offline events. This will not only increase the attendance rate at the general meeting of shareholders but also build solid relationships with shareholders.
3. Contradictory Messages
The message conveyed to the industry must align with what is communicated to investors. Any discrepancy will raise doubts and can be avoided by establishing a consistent information disclosure strategy across the entire team.
While the format and content of materials may vary depending on the channel, the core message needs to remain consistent to protect the company’s reputation and maintain investor trust.
4. Lack of Transparency
Concealing bad news or attempting to downplay its impact is a risky strategy. Investors need accurate data to make investment decisions, and if they feel they are not being fully informed, it will negatively affect their perception of the company.
IROs need to understand that investors are aware that companies will experience both positive and negative events. Being honest about bad news and presenting a clear plan to address it is far more effective than trying to cover it up and being discovered later.
5. Over-exaggeration or Understatement
Sudden changes in financial results will make shareholders anxious. IROs need to dig deeper into the causes of these fluctuations instead of simply taking credit for better-than-expected results or resigning themselves to abnormal lows.
It is important to put results into context for investors – whether the causes are internal or external. IROs need to help investors understand the implications of the current situation on the company’s mid-to-long-term prospects.
6. Ineffective Expectation Management
IROs must be realistic and open about risks and challenges to prepare shareholders for possible outcomes. Any surprises will lead to a loss of trust and damage the relationship.
Remember that communicating with investors is a form of marketing, providing valuable information for their strategic decisions.
7. Lack of Two-way Interaction
The IRO’s job is not just to inform investors about the company’s situation but also to receive and convey feedback from shareholders to the leadership team, helping to clarify issues when needed.
Proactively seek feedback from investors and organize interaction opportunities outside the traditional IR schedule. This could include webinars, capital market days, and web conferences with interactive features to encourage dialogue and participation.
8. Unclear Communication Strategy
Investors have access to various communication channels, and your strategy needs to reach them through their preferred channels. Otherwise, there is a risk of alienating or missing potential investors.
Consider using a diverse range of methods such as roadshows, emails, blogs, social media, webinars, and e-books. Leverage and adapt content from different channels to optimize each platform, saving time and resources while maintaining effectiveness.
9. Neglecting Individual Investors
The rise of individual investors has been a surprise to many IROs. While focusing on large institutional investors is important, individual investors should not be overlooked. According to statistics, individual investors accounted for 52% of total global assets under management in 2021, and this figure is expected to increase to over 61% by 2030.
It is essential to understand the differences in motivations and concerns between individual and institutional investors and to build a communication strategy accordingly, using the most suitable channels and approaches for them.
10. Limited Outreach
Diversify distribution channels to reach a wider range of investment communities, including analysts, journalists, and influencers, to increase brand awareness and transparency.
Don’t rely solely on traditional methods such as press releases. While these methods are still effective, integrating modern IR practices will yield the best results and meet the expectations of investors now and in the future.
Thiên Vân (Tổng hợp)
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