IR magazine

What cricket tells us about IR

‘Financial journalism is a bit like cricket,’ I found myself saying to a prospective IR magazine intern the other day. ‘Because the more you begin to understand about the business world, the more it comes to interest you.’

Clearly cricket was on the brain. It was not long after the Ashes series had finished and I had transformed from being the kind of person who scoffed at cricket fanatics to a bona fide cricket enthusiast.

Some accused me of glory-seeking (I’m English and we beat the Australians – commiserations to our Aussie readers) but I assure you that was not the case. The thing about cricket is that its appeal is unfathomable to those who don’t get the game. To a cricketing ignoramus, the Ashes is a long, fatuous and painfully dull exercise. But once I made the effort to understand the game, I began to enjoy the nuances, the sheer complexity and the number of variables that will determine whether a ball spins, slices or cuts.

Then factor in the terminology. It’s like another language. Designed to outmaneuver the novice, it does not exactly encourage wider understanding. This reminded me of the business world, where those in the know frequently rather enjoy (and benefit from) keeping the rest of us in the dark about what they are doing.

The interesting thing about the job of someone who works in investor relations is that the role requires you to do precisely the opposite. This means not reverting to business twaddle or obtuse management terminology but helping investors to really understand how your company works.

If only the cricket followers could be a bit more straight talking, there might be a few more fans of the sport out there.

Clare Harrison
IR magazine

Just what is it that makes Dutch companies so good at market communication?

Ask anyone what they associate with the Dutch and they will doubtless reel off a host of well-known stereotypes.

Demonstrably home to some of the world’s tallest people, the Netherlands is famous for everything from clogs, tulips and bicycles to a liberal attitude to sex and drugs.

But I was in the country last week for an entirely different reason: to try to find out what makes Dutch companies so good at investor relations.

At this year’s IR Magazine UK & Continental Europe Awards in London, Dutch companies put in a remarkable performance. Companies from Holland won more awards than firms from any other nation in Europe with 12, compared with 10 for the UK and seven for Germany.

Dutch firms were also short-listed 28 times, compared with 23 times for Swiss companies and 26 for French companies.

All this is pretty impressive given that they only had 15 companies in the FTSE Eurofirst 300 when the survey of fund managers and analysts was conducted. This compares with a whopping 62 UK companies and 36 German companies.

Clare Harrison

Deputy editor

The spy’s the limit

The spying scandal at Deutsche Bank continues to rumble on. German prosecutors are considering whether to launch a criminal inquiry. Wolfram Schmitt, the head of IR fired for his involvement in the spying, has reportedly filed a suit at a Frankfurt labor court over his dismissal. Bondorf, the shareholder targeted by the bank, is holding court with journalists at his Ibiza residence. Meanwhile, Deutsche says it will not release its full account of events until the authorities have completed their own investigations. Clearly, the full story will take some time to come out. 

In the meantime, the case draws attention to the blurry line that separates everyday IR activities, such as market intelligence or stock surveillance, and more questionable and intrusive practices. How far should you go to keep management one step ahead of troublesome shareholders?

As we have seen, the line is more clearly drawn in Germany than elsewhere, at least in the press and the public’s perception. The country’s history of state spying under authoritarian governments has led to a deep suspicion of snooping and data collection, as Deutsche Bahn CEO Hartmut Mehdorn learnt to his cost. He had no choice but to go after his company admitted systematically monitoring staff earlier this year.

Other parts of Europe are less sensitive on this issue. But the case at Deutsche Bank remains an ominous one for the whole IR community; it draws attention to how easily IROs can be caught between protecting management and protecting themselves.

Tim Human
IR magazine

Pensions may be dull but they will not go away

As a relatively lively and ambitious 15-year-old, I was once made to complete a career questionnaire. The idea of the test was to best align my skills, likes and dislikes with my ideal career choice. After sitting the test I waited expectantly for the results to be computed.

When the careers’ adviser proudly produced the results, however, I was less than impressed. My suggested careers were as follows:

1) Pension fund manager


2) Fence erecter


3) Embalmer. 



Given that, at the time, I quite fancied being an actress, I was totally depressed. For my teenage self, the hardest part to stomach – even harder than number three – was that sitting at the top of the list was an occupation that included the word ‘pension’.



Nowadays, however, I actually wish I was hearing more about the P-word because companies and governments everywhere have been guilty of neglecting the issue, and those headed toward retirement face very dreary prospects indeed.

In the UK, actuarial firm Lane Clark & Peacock (LCP) recently found that firms listed in the FTSE 100 stock index had a combined pension deficit last month of £96bn - a figure which, depressingly, is the largest on record.

A growing preference among companies has been to reward investors through dividends rather than using surplus cash to bolster depleted pension coffers. The study also found that of the 62 FTSE 100 firms with a pensions deficit, 46 paid dividends greater than the pension shortfall only five firms paid more in contributions than they paid shareholders.

But this inclination is not rational in the long term for investors or firms for one very obvious reason: companies that fail to look after their staff are unlikely to be profitable for investors in the long term.

Hopefully companies will have the courage and the sense to make this point to investors in these difficult times.

Clare Harrison

Deputy editor

Surfing for competitive intelligence

In late 2008 and early 2009, when the world learned that Steve Jobs’ medical condition was more serious than previously thought, the bloggers knew it first.

Blogs can be ahead of the curve when something major is up, says Penny Herscher, CEO of FirstRain, a search engine designed for business professionals hoping to find buried treasure among the recycled news that often dominates the web.

She argues that if IROs knew where to look, they could use the internet for everything from researching and targeting potential investors to uncovering the potentially embarrassing questions investors might ask during a conference call. A handful of IROs are already using FirstRain to perform these functions, says Herscher.

The company uses its own proprietary technology in an attempt to locate preeminent bloggers, especially those who aren’t yet on everyone else’s radar screens. 

This summer, when Microsoft’s Bing began dominating the news, for instance, FirstRain turned up quotes from industry players and analysts in its ‘On the Record’ feature.

David Weild, founder of capital markets advisory partners and a NIRI board member, notes that ‘search engines give you stuff that’s perfectly insightful but that everyone else has access to, too.’

The true goal, he says, is to drill down to the most important information by ‘finding somebody that knows something – who is a real expert in a field,’ while being someone who is not too connected to other peers.’ He concludes: ‘It’s that needle-in-a-haystack information that everyone really wants.’

Fortunately for IROs who don’t have the cash to spend there are also more and more free news and blog  such as Silobreaker than ever before.

Services such as these can help IROs to sift through news, blogs and research allowing them to monitor the internet more effectively than simply setting up a Google News Feed, for example.

Elizabeth Judd
Freelancer