Measuring Success in Investor Relations

We have the pleasure of talking with many investor relations (IR) experts on Enquire, the Investor Relations podcast. In this next article, drawing on that expanding archive, we look at some of our guests’ perspectives on how to measure success in IR. This, it turns out, can be a complex task as many of the outcomes are long-term and influenced by factors outside of the IR team’s control. While it’s tempting to focus on easily quantifiable metrics, like share price, IR professionals often look at a range of inputs, outputs, and qualitative measures to gauge their effectiveness. 

Here are some of the ways the IR professionals we spoke with measure success: 

Engagement with investors:  

• The number of meetings with investors is a measure of work rate and effort. However, it is important that these meetings are productive and targeted at the appropriate investors for each company. 

• Investor targeting and ensuring meetings are offered over the course of the year is a key performance indicator for many IR teams. 

• Tracking engagement with top investors, aiming to meet them multiple times per year, is another measure of success. 

• Responsiveness to investors and their queries is a key focus, aiming to be perceived positively. 

• Focusing on the quality of meetings and ensuring that they are a good use of management time, rather than just the quantity of meetings, is a factor. 

• Some IR teams also aim to increase sell-side coverage.

Feedback and perception

• Investor feedback is a crucial metric, with IR teams looking for positive views on the team’s responsiveness. 

• Direct feedback from investors, obtained through conversations after meetings, is seen as a valuable form of feedback in addition to broker feedback. 

• Some teams conduct perception studies, using an external party, to measure stakeholder satisfaction however, there are mixed views on whether these offer good value-for-money. 

• The quality of questions asked in investor meetings, the content of sell-side notes, and the general investor sentiment are all indicators of success. 

Internal alignment:  

• The CEO and CFO’s perception of how well the IR team has delivered is a key measure of success. 

• The Board’s feedback can be a part of the measure of success, ensuring that their needs for information and updates are met. 

Strategic alignment:  

• The IR team’s strategy and plan should align with the company’s wider business strategy. 

Qualitative Measures:  

• The ability of an IR team to be agile and reprioritise in response to a changing situation is seen as important. 

• The team’s effectiveness is also based on their ability to clearly communicate complex financial information in a way that is easily understood. 

• It is important to separate the performance of the IR team from the share price. 

In summary, while there are some common metrics used, measuring success in IR is not an exact science, and a combination of quantitative and qualitative measures is often used to provide a complete picture. Many IR professionals rely on a blend of their own judgment, feedback from investors, and the perceptions of the board to measure their performance. 

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