Five situations when PR and IR must work together

Public relations (PR) and investor relations (IR) are two distinct branches of corporate communications, but their messages must be aligned.

Before we look at examples of some critical situations, let’s start with a quick overview of the roles and reporting lines of the two departments.

• Public relations is focused on building and maintaining a positive public image of a company or organisation, managing its reputation, and raising awareness through various forms of media. PR activities include media relations, marketing, event coordination, communication, and social media management.
• On the other hand, investor relations is focused on managing the communication and relationships between a company and its investors or potential investors. It involves communicating the company’s financial performance, strategies, and growth prospects to investors, analysts, and financial media.

In practical terms, where these teams sit within an internal organisational structure varies across different companies. Some IR and Communications teams both report into one Director, but more commonly, the IR team reports to the CFO, whilst the Comms team reports into either Strategy or the CEO. Whatever the formal reporting line, it is critical that these teams work closely together.

Here are five key situations where the IR and Comms teams need to work together.

1. To develop a joint messaging strategy: Corporate communications and investor relations teams must work together to develop a messaging strategy that is consistent and aligned. This can help ensure that all external communications are in line with the company’s goals and values. The classic example of misalignment of messaging is Gerald Ratner, the owner of the 1980s UK high street jewellery chain who described his products as “total cr*p” and “cheaper than an M&S prawn sandwich, but probably wouldn’t last as long.” I assume his message was supposed to demonstrate great profit margins, but the audience included a variety of stakeholders and the consumer did not appreciate having their gifts to friends and family described like that. In one short speech, he broke the company, and over 30 years on, the phrase “doing a Ratner” lives on.
2. To coordinate financial communications: Investor relations teams focus on communicating financial information to investors, while corporate communications teams typically focus on more broad-based messaging, but by working together, an organisation can ensure that financial messages are not misinterpreted by the general media, and that the financial press has access to more detailed financial analysis if they require it. In some cases, the IR team may also have a direct relationship with certain journalists, e.g. from the Financial Times.
3. To align social media strategies: The extent to which an Investor Relations team uses social media partly depends on the share register composition, for example a company with more “retail” investors (i.e. individuals) may be more active on social media channels than a company with a predominantly institutional (e.g. pension funds) share register. Either way, the communications team will probably be more active on social media so, if an IR team has its own social media accounts, it may create content itself (largely focused on communicating financial performance and IR activity), and/or share content created elsewhere in the organisation.
4. To respond to crises: It hopefully goes without saying, that in the case of a crisis, corporate communications and investor relations teams must work closely to respond effectively. They can coordinate messaging and ensure that all stakeholders are kept informed. Being prepared for handling a crisis is important, and at a minimum both teams should have access of a full list of people who should be contacted in the event of a crisis, and a protocol for handling the crisis.
5. To communicate with employees: Whilst internal communications are focussed on ensuring that employees are well-informed about the company’s financials and long-term goals, the IR team can support them. This can help build employee trust and engagement, and is particularly important if there are employee share ownership schemes and employees are therefore shareholders.

By working together, corporate communications and investor relations teams can help build a strong and cohesive brand that accurately reflects the corporate strategy to all stakeholders.