Key developments for the IR profession in 2015

As the IR industry evolves, it is essential for IROs to keep a focus on their careers. Gillian Karran-Cumberlege highlights some vital topical issues for professionals. Feature article from IR Society – Informed – Winter 2014/2015

Af: Gillian Karran-Cumberlege – Fidelio Partners

As we look ahead to 2015, it’s a good time to review career trends in the IR profession. Understanding shareholders, and what they expect of IROs, helps to provide insight into the IR role and into how the board is thinking about IR. Based on a
search perspective which has developed that insight, here are some of the trends regarding career development in IR that we
have observed over the past year:

• Investment in the IR function has indeed picked up in 2014. This represents a small increase in the IR headcount. As in-house teams are refreshed, they ensure new skill-sets are incorporated.
One trend we have seen in larger teams is for ‘targeting and corporate access’ skills to be brought in-house.

• We are also seeing investment in the IR function among service providers. The retrenchment of the banks has created opportunities for the delivery of IR services and IR consulting by  other players. For IR professionals we see a substantial uptick in career opportunities as financial communications advisers beef up their IR/Capital Markets capability, for example.

• IR as a profession is undoubtedly becoming more financial and more technical. It is increasingly common for IR professionals to have a strong financial background, either in accounting or  banking or both. This is certainly evident when we look at the skill-sets and backgrounds of newcomers into IR.

• For more senior and strategic IR roles and certainly for the Head of IR role we are also seeing a clear preference on the part of employers for prior and proven IR experience. This is quite a shift. Only a few years ago it was recognised practice to bring across bankers and sell-side analysts with tremendous sector expertise but no IR experience. This shift is arguably of critical importance for the IR profession.

• It has long been recognised that UK IR teams are typically leaner than their continental European counterparts. At the large-cap level this continues to be the case with, for example, German IR teams delivering excellent IR with substantially greater resource than is common in the FTSE. However, we are also seeing a new breed of IRO in Europe. The wave of European IPOs in recent years, in particular across the technology and bio-tech sectors, has given rise to a lean and dynamic genre of IR which could become a new pan-European template.

• We have also been delighted to see fresh thinking about the IR role. Without a doubt some companies think about IR as a necessary cost, and lose sight of the value IR can bring. In contrast, we have been delighted to see companies setting up IR from scratch making a direct link between the calibre of IR and sustainable valuation. In terms of trends for careers in IR, this is surely one of the most important.

• And finally, when we look at career progression for senior IROs we see a mixed bag. One career model that works very well for the individual is the rotational role – 18 months to two years heading IR, and then on to the next finance role. This career path remains less common, but where this model is adopted we see a number of examples of IROs moving into increasingly senior finance roles. It should be noted that the market is not entirely convinced of this model of IR and the grand prix winners of best in class IR tend to be career IR professionals. The other trend in onward career development is the portfolio career, and we see a small number of examples of former senior IROs building quite interesting portfolios, including the occasional non-executive role.

So how do we assess 2014 in terms of IR career development? From Fidelio’s standpoint, 2014 was a good but not exceptional year for the IR career profession. Looking forward to 2015, we think it essential that the profession retains the vigour and dynamism we identified this year. Important ongoing work needs to be done on articulating the value that IR brings. This extends to corporate governance where, in some companies, IR teams are actively engaged and contributing; in others the company
secretary is very clearly taking charge. We will be looking for IR to be much more on the front foot here in 2015.

Above all we would like the IR profession to become more of a pipeline for the boards of tomorrow. So career success in 2015 for the IR profession could well also be a few more IROs succeeding to executive and non-executive board roles. This will surely raise boardroom awareness of what good IR can deliver, and benefit career prospects for the IR profession as a whole.

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