Our Director of Marketing, Branding & Strategy, Amit Anil, discusses common IR mistakes corporate companies make. 

Investor relations (IR) is an important aspect of a business to manage finance, communications, and marketing to enable an effective two-way communication process. Hence, having an understanding and addressing common mistakes can help your business stand out. 

Below is my take on the 3 common Investor relations mistakes made by corporate companies:

• Undermining the value of an IR Strategy

In my experience, many companies either don’t have an active IR strategy, don’t commit entirely, or do the bare minimum when it’s time to raise capital and then write it all off saying it doesn’t work.

An ongoing investor relations campaign earns shareholder trust and builds brand reliability. It allows current and potential investors to develop a robust relationship with the company and its management. Not enough companies hold value to one and in doing so are overlooking the importance of developing an engaged shareholder base.

• Lack of communication with shareholders

A challenging phenomenon I’ve had to face is company management choosing to be silent in an effort to avoid addressing bad news with shareholders. This approach causes more damage than addressing the bad news head-on, jeopardizing brand trust and reputation.

In today’s information-abundant world, everyone, especially investors, craves clarity. Clear communication is the key to building brand credibility and maximising awareness. With clear communication comes positive word-of-mouth, which we all know is paramount in attracting quality investors who will support the company long-term!

• Focusing on short-term share price fluctuations

An IR approach predominantly focused on influencing positive short-term upward share price movement, devalues all the effort the entire company has put in over its existence. It attracts fickle investors looking for a quick win. Not the ideal outcome. What it intrinsically communicates is a lack of confidence in the company’s ability to grow steadily and weather market volatility.

Shareholders want to see and believe that management stands by their strategies and communicates how they plan to navigate unchartered waters. Practice the simple yet effective mantra of underpromising and overdelivering. Aim for consistency and integrity in performance reporting and metrics measured. An integrated approach helps companies build long-term credibility and attract sophisticated, robust investors while encouraging existing shareholders’ continuing support.

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Read the conversation:

Amit Anil:

“Investor relations is a term that is commonly used for the human aspect, I believe, between corporate companies and investors, which is often misunderstood or undervalued. Based on my experience, I've shortlisted common IR mistakes that corporate companies make from a bird's eye view. Undermining the value of a well thought out, ongoing IR strategy is the key mistake that I've seen corporate companies make in my experience. Either they don't have one at all or they've got one in place, but they're not committing to it or they don't take it seriously till they need to raise capital. Secondly, the lack of communication and clarity between corporate companies and their shareholders is a key issues. Whether it has got to do with processes, paperwork, resources, regular webinars management, avoiding talking about bad news, or simply reporting on shareholder portfolios and performance. Finally, a common mistake companies make is focusing too much on short-term stock price fluctuations and how to influence positive upward stock price movement. To learn the solutions to these mistakes identified, click the link in the description.”

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