From Investor Relations to Business Leader:
The Pathway to CEO?
LOOKING AHEAD AT THE GROWTH TRAJECTORY OF CAREERS IN INVESTOR RELATIONS, WE BELIEVE THERE ARE EXCITING FUTURE CAREER PROSPECTS FOR TODAY’S IROs. THE PAST 10 YEARS HAVE SEEN A MOMENTOUS TRANSFORMATION IN THE POSITIONING, PERCEPTION AND CREDIBILITY OF INVESTOR RELATIONS LEADERS. WE SHOULD ALL BE PROUD OF THIS ACHIEVEMENT AND IT IS HUMBLING TO SEE WHAT HAS BEEN ACHIEVED. BUT WHERE NEXT FOR THE INVESTOR RELATIONS PROFESSION?
Investor relations is changing and this is bringing new possibilities for career progression that were out of the question only a generation ago. Until recently it was rare for an investor relations head to have a seat on a corporate executive committee. Now many have successfully made the transition into business leadership roles with some former high profile IROs having made the ultimate move to chief executive. Many others have transitioned into other senior roles including heads of strategy, company secretariat, corporate development, corporate affairs, chief of staff as well as non-executive directorships.
Entrants have come from differing and more sophisticated backgrounds and those arriving from outside the equity capital markets have strengthened their position by acquiring qualifications such as the IR Society’s Certificate in Investor Relations (CIR), CFAs and MBAs. This diverse, confident and experienced range of new IROs is needed for several reasons. CEOs and CFOs are under more pressure in the climate of market uncertainty with many realising that their careers are dependent on how they communicate with their financial stakeholders. Regulation and shareholder activism are taking up more of their time and research analysts and fund managers are far more demanding and more discerning about which companies they invest in. CFOs don’t have the time to speak with all stakeholders. Consequently, they need people who are comfortable facing investors and acting as their proxy; professionals who can answer detailed and analytical questions without needing to pass them on to higher-ranking company officers.
This has resulted in a stronger IRO; a more adaptable, ambitious and respected member of the team, rewarded by a significant increase in base salaries, bonuses and other remuneration options. Investor relations budgets, team sizes and their degree of external support have all grown. So, it’s no surprise that IROs are now moving into ever more senior roles.
At Broome Yasar Partnership, we have long predicted these trends. As the leading specialist executive search firm in investor relations and corporate affairs, we regularly advise and counsel IR leaders seeking career advancement. However, we are also well-positioned to see the challenges. Our latest research, conducted among 150 senior investor relations directors, shows that more than a third are keen to transition into a senior leadership role outside of IR over the next 10 years – a significant proportion which we believe now reflects the seniority and ambition of today’s IRO.
There will always be strong demand for those who are passionate about the profession and its future and wish to remain as career IROs. But what needs to happen for investor relations to take another major leap forward over the next decade?
This report, in association with the UK IR Society, provides role models for future career journeys by profiling 13 former investor relations professionals who have used their experience in IR as a vital stepping stone on the way to the C-Suite.
We must continue to come together as a community – be proud of this incredibly important and valuable profession. Career advancement in investor relations is limitless and there are numerous examples to prove this, as shown in this report.
By raising the profile of investor relations as a potential source of senior and valued company executives, we hope and expect this route will become even more well-trodden in the future.
CHIEF EXECUTIVE – LAIRD
LAIRD 2016 – PRESENT
CHIEF FINANCIAL OFFICER
LAIRD 2015 – 2016
GROUP FINANCE DIRECTOR
DRAX GROUP 2008 – 2015
DIRECTOR OF FINANCE
MARKS & SPENCER 2004 – 2008
INVESTOR RELATIONS DIRECTOR
MARKS & SPENCER 2000 – 2004
OPERATIONS REVIEW, CORPORATE FINANCE AND STRATEGY
MARKS & SPENCER 1992 – 2000
COOPERS & LYBRAND 1987 – 1992
DOW CORNING 1984 – 1985
TONY QUINLAN USED A FOUR-YEAR SPELL IN INVESTOR RELATIONS TO SET HIS CAREER TRAJECTORY FOR THE GOAL OF BECOMING CHIEF EXECUTIVE OF A PUBLICLYLISTED COMPANY. HIS SUCCESS IN NAVIGATING THE ROUTE SHOULD SERVE AS A BEACON TO DIRECT OTHER AMBITIOUS IR PROFESSIONALS.
After a brief period as a research chemist and qualifying with a BSc (Hons) in the subject, Quinlan had undertaken chartered accountancy training to give him the traditional finance tools needed to begin a journey in finance. On joining Marks & Spencer, he initially stayed on this path, taking a role in operations review and progressing from there to corporate finance and strategy roles. Eight years down the line, the department store chain was going through a turbulent time with a succession crisis in the boardroom, following the retirement of longstanding chief executive Sir Richard Greenbury and his unsuccessful replacement by insider Peter Salsbury.
The retailer’s response was to ask Quinlan to set up its first ever investor relations function in an attempt to keep investors onside. Looking back, he sees his four years as investor relations director as pivotal in equipping him with the external perspective that positions in the C-Suite require.
Salsbury’s time in the top job was brief, with M&S then hiring European retail expert Luc Vandevelde, who brought in Roger Holmes, a retail consultant who later succeeded him. The turmoil continued until May 2004 when Sir Philip Green showed interest in buying M&S and the board brought in Stuart (now Lord) Rose to fight to maintain the company’s independence. “It was a huge time for M&S,” Quinlan recalls. “It was a fantastic time to be in investor relations.”
During this period of changing leaders, Quinlan’s task was to liaise with investors, take soundings on how well the new CEO was being received by shareholders and feed back concerns as the relentless flow of disappointing quarterly sales figures took time to quell. When Sir Philip withdrew his bid activity, Stuart Rose brought in Amanda Mellor (also profiled in this report) who he had worked with previously, to spearhead the investor relations function.
Quinlan had already flagged his desire to move back into a major commercial finance position and believes strongly that people with ambitions of reaching the C-Suite should not stay too long in IR. “I had probably spent as long in investor relations as I wanted,” he says, “and I was keen to move my career on from there.” Quinlan sees his journey to IR as one of two main routes that people take to the role, gaining experience in a company in other posts before moving to the function.
“People taking the route that I went along tend to know a lot about the company they’re working for, because of the jobs they have already done there,” he says. “They also know a fair amount about the sector but they don’t know much about IR so that is their learning curve. They go into investor relations and they have to learn there.”
The other route, he says, is to become a “professional IR person” who spends periods in the role at a number of companies, bringing expertise about the role and learning quickly about the specific businesses. “I feel that the route I took is probably the easier one,” he says, “because to really understand a complex organisation and sector takes quite a lot of time.
“Investor relations, although it does have its complexities, is actually a simpler thing to learn.
“If I had known investor relations like the back of my hand but had to learn about M&S and the retail sector, I think it would have been a slightly more complex thing to do. But both models are completely workable.”
After his four years in IR at M&S, Quinlan became finance director of M&S’s general merchandising and then on to director of finance, reporting to the group finance director, whose role included retail and the company’s international supply chain and IT operations. He then got the boardroom post that he desired as group finance director of Drax Group, Britain’s largest single-site power generator.
Moving on after seven years, he took a similar role at electronics and wireless systems group Laird and then became chief executive in 2016. His time in IR and subsequent senior management roles overseeing the function have given him a strong conviction that IR plays a pivotal role in refining and strengthening corporate strategy.
“When it is done really well, I think investor relations is a very strategic job,” he says. “What you’re doing is articulating the company’s performance and strategy to a whole bunch of very intelligent investors and getting into quite granular conversations with them about those things.”
Quinlan believes that the stereotype of the IR role as simply listening to investors, giving them the company line in return and reporting any resistance massively understates both the complexity and importance of the job, “It’s not just transmitting,” he says. “It does become a conversation and really good IR people assimilate and analyse the flow of information, coming back with questions and challenges and then testing the company’s strategy with that.”
“A spell in a senior position in investor relations which helps an aspiring executive to genuinely understand how the external world views the organisation is massively important.That changes one’s perspective, making executives outward, rather than internally-focused. It also hones individuals.”
Investor relations professionals, he argues, should be facilitating and enabling the constant prodding and probing of company strategy, taking part in that process and helping address any gaps or weaknesses identified. That becomes part of a circular process, through which corporate strategy is strengthened. IR professionals should be driving this movement as valued individuals with the ability to influence the entire organisation all the way to the executive team and CEO. “Your job is to work with the organisation to try to improve the story and that’s not a communications challenge,” he says. “It’s about improving the truth of the story, which is about the strategy.” Quinlan also found that there was a personal strategic and competitive advantage later in his career deriving directly from his time in investor relations.
In his current chief executive role, he remains a firm believer that ambitious career professionals should spend a few years in the function. The benefits of this are manifold, he holds. A spell in a senior position in investor relations which helps an aspiring executive to genuinely understand how the external world views the organisation is massively important. That changes one’s perspective, making executives outward, rather than internally-focused. It also hones individuals’ critical abilities and is a training ground for sharp analytical minds. “If you’ve never done an external-facing job, the danger is that you become too accepting of the corporate norms,” Quinlan states. “But when your job has been to explain your company to the outside world and also to get feedback on what perhaps needs changing, that challenge is a great preparation for senior executive jobs.
“You’re constantly more self-challenging because you have spent a big slug of your time being challenged yourself.”
It is a journey that has certainly worked for Quinlan, demonstrating that the path from investor relations is a viable and successful route to the very top of companies. Now it is up to other ambitious IR professionals to follow his lead.
GROUP CHIEF OPERATING OFFICER AND CHIEF FINANCIAL OFFICER – SKY
GROUP CHIEF OPERATING OFFICER
SKY 2016 – PRESENT
CHIEF FINANCIAL OFFICER
SKY 2008 – PRESENT
HEAD OF INVESTOR RELATIONS AND SENIOR FINANCE ROLES
SKY 1999 – 2008
N M ROTHSCHILD 1996 – 1999
PRICEWATERHOUSE COOPERS 1992 – 1996
ANDREW GRIFFITH SEES THE MOVE FROM INVESTOR RELATIONS TO GENERAL LINE MANAGEMENT FINANCIAL ROLES AS A NATURAL PROGRESSION. “THERE ARE ASPECTS OF CONTINUITY AND ASPECTS OF CHANGE,” HE SAYS. “FOR ME, IT WAS OBVIOUSLY A CHANGE OF ENVIRONMENT BUT IT WAS STILL DEALING WITH A CITYFOCUSED AUDIENCE AND PERSPECTIVE WHICH THE TIME I HAD SPENT AT ROTHSCHILD AND IN INVESTOR RELATIONS AT SKY WERE INVALUABLE PREPARATION FOR.
“In today’s world, where capital markets are a very significant stakeholder in every business and there is a much higher degree of public scrutiny on company leadership, then having exposure to investor relations in your career is a very valuable skill set to acquire. That has certainly been my experience and I think it will be increasingly true everywhere.”
In fact, Sky believes in this to such a degree that it regularly offers roles within its investor relations team to highly-valued, high-potential finance colleagues. “It gives them exposure to it earlier in their careers than they would otherwise have,” says Griffith. “And gaining that perspective of what the City looks for in a company and how you engage with the City and investor stakeholders also enables them to go on and become better professionals in their day jobs because they know what is being looked for.”
Griffith is not convinced that investor relations is necessarily taking a more strategic role within companies. “I would say that it has always been strategic,” he says. “It’s a non-sequitur of a question because investor relations is a strategic role. I don’t think you should interpret any role narrowly and that’s as true with investor relations as it is elsewhere.
“There are increasingly multiple audiences that the investor relations community has to interact with. Perhaps in the past it would have been overly focused on the sell side. Now it has added to that much more of a direct relationship with current and potential investors, unfiltered by the sell side, but also with boards. Boards in my experience are becoming more focused on companies’ interactions with their institutional investors as well. So there’s a key role that good investor relations can play in forming and engaging in the debate with the board.”
“It’s a truism but I think that people look for a portfolio of skills. Business today is so multi-faceted, so fast moving and often so international that any one skill set, even though it is a good skill set and an important one for the role, is not going to be enough on its own”
Despite this strong belief, Griffith accepts that the path from investor relations to the C-Suite is not always well laid-out. “It’s either about acquiring a valuable skill set or about the application of a set of skills which are useful all the way through and up to the board,” he says. “I wouldn’t overly narrow it because my journey to the board of Sky was primarily through the finance function and a much wider range of roles than just investor relations.
“The context is important. I think investor relations is a really useful string to your bow but it is not going to be your only string. As a finance director you will need a skill set that audit committee chairs and chief executives are going to look for. Investor relations can provide some of that but it’s not going to obviate the need for a good basic set of financial skills in the round.
“It’s a truism but I think that people look for a portfolio of skills. Business today is so multi-faceted, so fast-moving and often so international that any one skill set, even though it is a good skill set and an important one for the role, is not going to be enough on its own.”
Griffith also believes that investor relations professionals moving on from their roles to other financial and general line management posts have to be ready to accept that they will not continue to enjoy the close and privileged access to senior management that IR affords. “In investor relations, there’s a disproportionate amount of time exposed to senior management and external shareholders and that won’t necessarily be the case if you move to become a divisional finance director,” he says. “But that’s part of the journey and you will gain a broader perspective by progressing to other roles than if you remain functionally in IR where you look at everything through a particular lens which is a strength and also a weakness.”
The path will also vary hugely, he warns, depending on individual characteristics and on the energy, passion and commitment that people devote to their time in IR. “A lot of it depends upon what you put in,” he says. “It’s a great role. I think it’s a very exciting role that tends to be external-facing and often quite reactive to events. Clearly you are at the apex of a lot of the big changes that flow through a company to the capital markets and also flow in the opposite direction. I’m very supportive of anybody wanting experience of investor relations and I think it can be a good differentiator in a broader finance or communications career.”
NICK VON SCHIRNDING
CHAIRMAN – FODERE
FODERE 2017 – PRESENT
ORTAC RESOURCES 2017 – PRESENT
GARRISON CAPITAL 2016 – PRESENT
CARAJAS COPPER 2015 – 2016
ASIA RESOURCE MINERALS (FORMERLY BUMI) 2012 – 2014
EXECUTIVE DIRECTOR STRATEGY AND INVESTOR RELATIONS
BUMI 2011 – 2012
HEAD OF CORPORATE AFFAIRS AND INVESTOR RELATIONS
ANGLO AMERICAN 1999 – 2010
MINORCO 1994 – 1998
DE BEERS 1992 – 1993
CEO OF VENTURE CAPITAL
LITET 1990 – 1991
FINANCE MANAGEMENT TRAINEE
ANGLO AMERICAN 1988 – 1989
NICK VON SCHIRNDING DOES NOT EXPECT MANY CHIEF EXECUTIVES WILL EXPERIENCE WHAT HAPPENED ON HIS FIRST DAY IN THE ROLE AT FORMER FTSE-LISTED COAL MINING GROUP BUMI IN 2013. THE COMPANY’S FORMER EXECUTIVE DIRECTOR OF STRATEGY AND INVESTOR RELATIONS HAD HARDLY HAD TIME TO SWITCH TITLES WHEN HE RECEIVED A PETITION FROM SHAREHOLDER NAT ROTHSCHILD REQUESTING AN EGM TO OUST THE ENTIRE BOARD.
He does feel that his background as a communicator from his 11 years as head of corporate affairs and investor relations at the much larger miner Anglo American stood him in good stead for dealing with one of the most colourful shareholder battles in recent times.
At Anglo American, von Schirnding, who started his career in finance and went on to run a venture capital firm and work as a financial manager for miners De Beers and Minorco, handled communications for the first time and played an integral role in the company’s listing in London.
This gave him a deep understanding of how to communicate effectively and engage with a range of stakeholders, helping him keep control of the situation and it is a skill that he feels is now a vital part of every CEO’s job description.
“I think that nowadays the ability to communicate well is vital for a CEO,” he says. “There must be a cohesive message for all stakeholders – internal and external – which ultimately links through to the common strategy of the group.
“It’s not just what you communicate; the way people communicate has become more sophisticated over the past few years. Thanks to technology, stakeholders read much more broadly about what is going on and have a better understanding of each company. That puts pressure on CEOs. As a company leader, you need to be able to anticipate that and to respond in the right way.”
At Asia Resource Minerals, he began as head of investor relations before being elevated to chief executive in 2012 at the height of the company’s crisis, which led to his job being referred to as the most difficult role in the mining industry. He left the London-listed group towards the end of 2014. Having overseen a substantial overhaul he then moved to become chief executive of Carajas Copper Company, a Brazilian mining business and also a director at Garrison Capital, which has successfully founded and listed 22 resource companies.
Von Schirnding’s calm disposition helped him cope in the spotlight but he says he also received invaluable support from his board of non-executive directors, which included heavyweights such as Sir Julian Horn-Smith, Sir Graham Hearne and Lord Renwick of Clifton.
“I found that senior people acted as a great counsel,” he recalls. “It can be lonely at the top, but I could expose my inner concerns to certain members of the board and have a constructive and supportive discussion.”
"I will always value my background in investor relations and corporate affairs.They are vital skills to include in today’s boardroom”
It is this willingness to learn from others that von Schirnding believes is vital for investor relations professionals who aspire to move into the C-suite.
He is passionate in believing that the role of IR isn’t just about “being a mouthpiece” but requires in-depth knowledge of an organisation. Indeed, this was something he spent a lot of time on prior to joining Anglo American when it floated in 1999.
“You need to understand the business,” he explains. “You need to know what the key drivers are in your business, facts and financials, the capital structure and the elements that make it up. People will give you a certain timeframe to work out if you know what you are talking about. If you pass, it is an empowered role. If not, you won’t get a second chance.”
Von Schirnding also believes that investor, public and media relations, reputation management and corporate affairs can all be a great stepping stone to learn about a business, thanks to their “bird’s eye view” of everything that goes on in an organisation. “In these roles you see everything that is going on,” he states. “From that perspective, it provides a great opportunity to immerse yourself in the business. Don’t stay on the periphery. Roll up your sleeves.”
When he joined Anglo American, he actively asked to be involved with other operating committees to gain a better understanding of the business. “I said: ‘I’m here to learn, not to interfere,” he says. He believes Anglo American’s culture helped him to work towards his goals and that the company’s supporting management team was invaluable.
Von Schirnding was part of an initial small and close-knit group of people at Anglo American, and he worked closely with the management team of six. He says this gave him a taste for what it takes to run a large organisation, to understand the challenges of being a newcomer to the market and to appreciate the roles and responsibilities of the senior management.
Encouragingly, he sees an increasing trend of people moving from IR functions into general management. “The roles are increasingly seen as stepping stones,” he states. “The importance of understanding the role that IR plays in the overall structure of a business is growing. Let’s not forget, IR issues are serious when you get them wrong.
“In my various roles I’ve always said to managers if you don’t understand the strategy, rest assured no-one else will either. What you understand, you value. That is key. I have held onto this for years. We need to understand what we are trying to say and project it in a cohesive way.”
Von Schirnding’s career is comparatively unusual in that he has moved in and out of a key communications role with ease. However, he feels that this experience equips him well to cope with the rigours of being a CEO and that his future lies in management roles.
“I’ve moved from one CEO role to another,” he says. “But I will always value my background in investor relations and corporate affairs. They are vital skills to include in today’s boardroom.”
GROUP SECRETARY AND HEAD OF CORPORATE GOVERNANCE – MARKS & SPENCER
GROUP SECRETARY AND HEAD OF CORPORATE GOVERNANCE
MARKS & SPENCER 2009 – PRESENT
HEAD OF INVESTOR RELATIONS
MARKS & SPENCER 2004 – 2009
INVESTOR RELATIONS AND CORPORATE COMMUNICATIONS ADVISER
HOLLOWAY & ASSOCIATES
HEAD OF INVESTOR RELATIONS
CORPORATION DIRECTOR OF CORPORATE RELATIONS AND INVESTOR RELATIONS
THE BURTON GROUP AND ARCADIA GROUP
DIRECTOR, CORPORATE FINANCE TEAM
AMANDA MELLOR’S EXPERIENCE IN INVESTOR RELATIONS INCLUDED DEFENDING MARKS & SPENCER FROM SIR PHILIP GREEN’S TAKEOVER AMBITIONS.
Now she sits at the main board of the company, playing an active role as company secretary, head of its corporate governance agenda and the leader of a 60-strong team that encompasses company secretariat, legal, internal audit, pensions, insurance and the corporate archive.
Hers is a highly varied career, starting off by working in investment banking for ten years, much of it based in France, specialising in retail strategy and mergers and acquisitions. That acquainted her closely with the retail sector but on her return to the UK from France she was keen to do something different and took an unexpected turn when a connection put her in touch with The Burton Group, which was looking for a director of corporate relations and investor relations. “Frankly I knew nothing about investor relations and corporate communications,” she says. “But the Burton Group was looking for someone apparently just like me and I was sent off to go and meet them. Within two weeks, I had handed in my notice.”
Mellor stayed with Arcadia Group following its demerger from Burton, leaving before Sir Philip Green’s takeover of Arcadia and working in investor relations for US technology company Infonet and for a PR and investor relations agency advising French and Italian companies looking for UK exposure. Then, after taking maternity leave, she received another unexpected phone call. Sir Philip Green was publicly mooting a takeover of Marks & Spencer and Stuart (now Lord) Rose, who Mellor had worked alongside at Burton, had taken over as M&S CEO and was on the end of the line. “Six months after my son was born, Stuart rang and asked if we could have coffee and that’s how I ended up at M&S,” she says. “I came back in, assuring my husband that I would only do another three to five years in investor relations. I have almost lost count of the number of times that I thought I had left IR but it just pulls you back in. The story at M&S was so big and so exciting. It was a chance to work properly with Stuart, in an iconic business that I absolutely love, so it was impossible for me to say no.”
Mellor arrived at M&S with a three-to-five-year time horizon in regard to the investor relations job’s possibilities and she has strong views on how long professionals should stay in the role. “I think in IR there is only so much time that you can carry on doing the same things at the same business”, she says. “It’s important to move around. At the end of five years, I had written hundreds of press releases and done countless investor meetings. IR is a very full-on job, particularly at a company like M&S where we would be meeting with at least 300 investors a year.”
She was therefore starting to think about what to do next when M&S combined the roles of chairman and chief executive – challenging best-practice corporate governance guidelines at the time. Mellor worked closely with the outgoing company secretary, leading to her being given the opportunity to take on the job herself on his retirement. “I think if someone had told me I would become a company secretary, I would have been amazed,” she says, “because I was not a lawyer or chartered accountant or a chartered secretary. But markets were dealing with the post-financial crisis fallout, we were dealing with ‘explaining’ why we weren’t ‘complying’ with the Corporate Governance Code, and the Board was of the view that stewardship, engagement and good governance were key. I think I was in the right place at the right time and, thanks to my time in IR, I certainly ticked the stewardship and engagement boxes, even if I didn’t tick the more obvious other ones. That was eight years ago now, so I must be doing something right.”
“I do think that you can’t do the IR role for very long in the same organisation.You either need to move to another role in the same company or to another IR role.You have to decide whether you are going to be a career IR professional or whether there’s something else that you want to do with the amazing breadth of skills you have.”
Mellor claims to have been “deeply unstructured” in her career progression and advises current IR professionals to take more “ownership” of their career plans earlier on and remaining openminded and flexible as to how they might apply their skills into other roles. “To be good in IR you need strong commercial and financial acumen, great communications and interpersonal skills, and an ability to manage ambiguity to see the multiple shades of grey in any given situations and the organisation. You need to be adept at managing your business relationships and navigating your way to get what you need to answer the myriad of questions you will be asked about the company – I always say it is like being on Mastermind 24/7! You need to be a bit like a chess player and think several steps ahead to anticipate where any question or situation is going and how you can best support the people you are dealing with. You need to be calm and organised, know your numbers and facts, a self-starter to get the information you need, and happy working in a small team.
“Many of these skills and attributes are essential for a good company secretary. Yes, there is a strong technical requirement to the role, but a large part of my job is supporting the Board and the business, thinking strategically about the long-term impact of the decisions being taken, ensuring the Board has the information to support these, and offering technical and pragmatic advice. Like IR, you need to be good at managing ambiguity: many of the issues I deal with do not have clear-cut answers and require a range of considerations in order to reach a workable solution. I still meet with investors but these days it is to discuss remuneration, succession or governance matters. It is truly a fascinating role and one that challenges me and the team constantly.”
Mellor remains a huge fan of the value of investor relations. “It’s a very exciting role, and I sometimes miss that” she says. “You are constantly interacting with clever, challenging people who will ask varied and complex questions about your organisation and you always have to be one step ahead of them. It’s a very intense, fast environment and a full-on experience. You pretty much know everything that is going on in a company and you are interacting with the CEO and CFO and senior management all the time. I think being that well informed and close to the epicentre is what makes it hard to move on to something else.
“I do think that you can’t do the IR role for very long in the same organisation. You either need to move to another role in the same company or to another IR role. You have to decide whether you are going to be a career IR professional or whether there’s something else that you want to do with the amazing breadth of skills you have.”
CHIEF FINANCIAL OFFICER, UK AND INTERNATIONAL DIVISION – RSA
CHIEF FINANCIAL OFFICER UK AND INTERNATIONAL DIVISION
RSA DEC 2015 – PRESENT
INTERIM GROUP CFO
DIRECTOR, PERFORMANCE STRATEGY AND INVESTOR RELATIONS
RSA 2014 – 2015
STRATEGIC REVIEW AND INVESTOR RELATIONS DIRECTOR
RSA 2013 – 2014
INVESTOR RELATIONS DIRECTOR
RSA 2012 – 2013
DIRECTOR, INVESTOR RELATIONS AND CORPORATE FINANCE
CABLE & WIRELESS 2012
DIRECTOR, INVESTOR RELATIONS AND CORPORATE AFFAIRS
CABLE & WIRELESS WORLDWIDE 2011 – 2012
DIRECTOR, INVESTOR RELATIONS AND STRATEGY
LEGAL & GENERAL 2009 – 2011
GROUP STRATEGY DIRECTOR
LEGAL & GENERAL 2007 – 2009
DIRECTOR, BUSINESS SOLUTIONS AND PLANNING
LEGAL & GENERAL 2003 – 2005
MATT HOTSON ISN’T SURE THAT HE EVER MAPPED OUT A LINEAR PATH FROM INVESTOR RELATIONS TO BEING A CHIEF FINANCIAL OFFICER, THOUGH THAT IS THE PATH HE HAS TAKEN AT INSURER RSA.
“I WAS FIRST OFFERED A JOB IN IR TEN YEARS AGO,” HE SAYS. “I DIDN’T KNOW WHAT TO EXPECT BUT I WENT INTO IT WITH ENTHUSIASM AND JUST GOT STUCK IN. I DON’T THINK I ACTIVELY SOUGHT OUT A ROLE IN IR AND NOR DID I GO INTO IT THINKING IT WOULD LEAD ME ANYWHERE IN PARTICULAR. IT JUST FELT LIKE A NATURALLY INTERESTING THING TO GO AND DO.”
Hotson spent six years in IR roles at three different companies after deciding to develop a skill set that was transferable across industries and different businesses.
“I found that investor relations was quite a fulfilling thing to do in itself,” he says. “But ultimately in IR you end up being the number two in the room. Even though you might say all the same things that a chief executive or chief financial officer says to an investor, it doesn’t carry the same weight as it does if you are the CEO or CFO saying those things.
“That ultimately was what led me to a degree of frustration and a realisation that I wanted to go and do things that would get me back in front of those investors as the CFO of the business. I think IR gives you a good opportunity to flex certain muscles and gives you a different perspective on a business that makes you a potentially more effective and available CFO than if you haven’t done IR.”
Indeed, Hotson believes IR puts executives in such powerful positions that it is difficult to adjust when moving to a general management role.
“When you make the move out of IR, like I did when I went from the function to one of the business divisions within RSA,” he says, “you have to consciously recognise that you’re moving from a position where you have a right to have access to every piece of information about an organisation to a situation where you no longer have that right.
“For me, it was a case of saying: ‘Right, that’s okay. I’m just going to go and do a different job now and I’m not going to try and see everything I used to see because it’s not appropriate for me to do that and it means it would detract me from being effective in my new job.
“IR gives you a very privileged position in terms of access to the CEO and CFO but also access to all sorts of information about the business. You see all sorts of things that probably very few other people see when you’re in the IR seat”.
Is IR becoming more strategic? Hotson believes it varies enormously, depending on the company. “In my experience, an awful lot depends on the executive team you’re working with,” he says. “If I think about the half a dozen or so CEOs that I’ve been head of IR to, I’ve seen a range of bosses, from individuals who were relatively new to this kind of world and needed a lot of support, guidance and advice all the way through to people who were very much old hands at what they do and just needed good execution.
“I think good IR professionals have an opportunity to be strategic and to provide insight. A couple of times in my career, I have gone from being head of IR to being much more than that, in terms of either helping with defence against a takeover or providing strategic advice in times of crisis.”
At Cable & Wireless Worldwide, for example, Hotson joined as head of IR and communications and says he ended up being head of IR to a CEO and CFO who had limited listed company experience. “That meant that when takeover bids came in from Vodafone and then from Tata Communications, they looked to me to provide some leadership and guidance,” he says. “I ended up playing a central part in that defence process, which ultimately led to the sale”.
At RSA, meanwhile, Hotson’s period as head of IR thrust him to the forefront of the company’s defence against a non-solicited approach from Zurich Insurance Group.
“If you don’t invest the time to understand the business you’re operating in,I think you’re a less valuable professional but also you’re missing a big opportunity to position yourself for bigger roles”
“I think you have that opportunity partly because you have a chance to build relationships with senior people in the firm and therefore they trust you if you put up your hand and say you can help when crisis strikes,” he says.
“The people who can help in those situations are people who are trusted and very valuable. Also, if you’ve done the IR job well, you have a sense of what the shareholders want and that’s a valuable commodity that you can leverage into a more strategic role. IR is definitely a good springboard into those bigger strategic roles.”
While he did not have a specific mentor at any of his employers, Hotson says he tried to observe how the CEO or CFO at each company operated and to take good practice learnings from that, as well as ponder how he could do better if he was given the chance at the role.
“I think I’ve picked up something from all the executive teams I’ve worked with and that’s made me the CFO I am today,” he says.
As for advice for people currently working in IR roles who want to progress further, Hotson believes it is important to balance the external and internal-facing sides of the job.
“I think you have to be prepared to spend an equal amount of time in the outward-facing world talking to analysts and investors as you do in the internal world of understanding the business,” he says. “If you don’t invest the time to understand the business you’re operating in, I think you’re a less valuable professional but also you’re missing a big opportunity to position yourself for bigger roles. The key thing about being in IR is that you have the opportunity to ask any individual in the business any question about anything on the basis that you need to know so you can answer questions from investors.
“It’s a very privileged position that gives you a platform to allow you to learn how business works and understand not simply its finances but also its actual mechanics. You’ve got to be prepared to put in that investment. But I think you are also in the luxurious position to be able to not just be the mouth of the company in terms of talking to shareholders and telling them what’s going on but to also be the ears of the organisation, listening to the feedback, taking the time to feed it through to the board and CFO and also the wider management team so that they have awareness of shareholder feeling and some context for their roles.
“It’s an incredibly valuable thing for you to do for those people and it also means that you get a chance to build a network internally, which is what leads ultimately to your next job. Heads of IR who sit in a corner of head office and spend all their time on the phone to the outside world rarely get offered major jobs internally because nobody knows who they are.”
“You see all sorts of things that probably very few other people see when you’re in the IR seat.”
HEAD OF STRATEGY AND INVESTMENTS – BRITISH LAND
HEAD OF STRATEGY AND INVESTMENTS
BRITISH LAND 2016 – PRESENT
HEAD OF STRATEGY AND INVESTOR RELATIONS
BRITISH LAND 2015 – 2016
HEAD OF INVESTOR RELATIONS
BRITISH LAND 2010-2015
STRATEGIC COMMUNICATIONS ADVISER
LLOYDS BANKING GROUP 2009
DIRECTOR OF INVESTOR RELATIONS AND DIRECTOR OF CORPORATE COMMUNICATIONS
CADBURY 1998 – 2008
CREDIT LYONNAIS LAING 1994 – 1998
PANMURE GORDON 1986 – 1994
SALLY JONES BEGAN IN BUSINESS ON THE OTHER SIDE OF THE FENCE TO INVESTOR RELATIONS AS A FOOD ANALYST WRITING REPORTS AND TIPPING STOCKS FOR INSTITUTIONAL CLIENTS. AFTER 12 YEARS AT TWO DIFFERENT FIRMS, SHE MOVED OVER TO THE CORPORATE SECTOR, JOINING CADBURY TO HEAD ITS INVESTOR RELATIONS TEAM.
“I had been looking to leave the City for a while and it was entirely serendipitous,” she says. “I knew Cadbury well because I followed the company as an analyst and it had a very well-oiled IR machine.”
Jones spent ten years at the confectionery group, adding head of corporate communications to her IR beat for a spell and also acting as head of finance for global sales and marketing.
“There were lots of things going on in the group at the time and IR was always at the heart of everything,” she says. “I was involved in strategy and took part in discussions and we did some really interesting deals including the acquisition of Adams in the US, a major refinancing and attempted disposal of our beverages businesses to Coca-Cola which culminated in a demerger in 2008.
“It was an incredible time because of the impact of these moves on the businesses.”
The IR task was made all the more critical by the fact that the company was being targeted by US activist investor Nelson Peltz for a year before the demerger.
Dealing with such a public activist investor entailed the development of a new skill set in itself and more excitement was to come as Jones’s next role was a six-month stint as strategic communications adviser at Lloyds Banking Group in 2009, just after the onset of the global financial crisis.
The challenge was to communicate the bank’s £20bn recapitalisation, working alongside its investor relations department and UKFI, the organisation overseeing the Government’s financial investments.
After a brief stint with Unilever, Jones returned to investor relations at British Land. “I was only supposed to be here for a short period of time and I didn’t know much about property.” Now in her seventh year at the group, she has progressed to be head of strategy and investments and believes that her background in IR provided a perfect training ground for the role she now has.
“Investor relations puts you at the heart of everything,” she says. “I always say to people that it really does depend on the type of CEO and CFO you have got as to whether IR is really viewed as essential. If they are not serious about it then I don’t think it is a very interesting role. But if they see its role as very strategic and view its relationship with the City as very important, you then have to be allowed into all areas of the business as otherwise you cannot do your job.
“You’ve got to take charge of your career and have a plan.It’s too easy when you’re in IR just to settle in because you’re not naturally moved about.”
“That makes it a lot more interesting and secondly, if you are able to be that person that can bring in the outside voice to a company then you can really make a difference.
“You have to be able to put your external hat on and tell people inside your company how people outside it actually think.”
Jones sees her current role as a natural extension from her time in IR and believes the skills she learned there are being applied at a different level now. “After a while in IR, I was agitating to do something else,” she says. “In property, there’s always the next big deal but I did find it quite difficult to plan a route. It didn’t happen immediately.”
Jones sits on British Land’s executive committee and believes investor relations has an increasing role to play in corporate strategy. She also advises IR professionals who are ambitious to move to general management roles to plan their careers carefully. “I never had a great plan,” she says, “but I do think that you’ve got to take charge of your career and have a plan. It’s too easy when you’re in IR just to settle in because you’re not naturally moved about. If you’re in finance, every two years you’ll be moved on to do something else.
“There’s often a nice career path there. But in IR, even if you climb up through the finance function, there’s no career path so I think you’ve got to take much more active charge of your career.”
She advises IR professionals to make a specific effort early in their careers to gain a breadth of different business experiences, including charitable work at a senior level.
“The problem is that the longer you stay in IR, the narrower you can become,” she says. “I think you need to work hard at finding your route.
“But there’s no reason why a good IR person cannot progress to the top of business because they’re strategic, numerate and have the energy to do all the things that you need to do. You just need somebody to give you a break.”
CHIEF FINANCIAL OFFICER – PLAYTECH
CHIEF FINANCIAL OFFICER
PLAYTECH JAN 2017 – PRESENT
HEAD OF INVESTOR RELATIONS
PLAYTECH 2015 – 2016
HEAD OF INVESTOR RELATIONS AND STRATEGIC PROJECTS
TEMENOS 2012 – 2015
DIRECTOR, CORPORATE BROKING
DEUTSCHE BANK 2007 – 2012
HOARE GOVETT 2004 – 2007
ASHURST 1999 – 2004
FINANCIAL SERVICES AUTHORITY 2002 – 2004
ANDREW SMITH CHOSE A DELIBERATE CAREER ROUTE OF STARTING OFF IN INVESTOR RELATIONS AFTER DECIDING TO SWITCH FROM HIS ORIGINAL DISCIPLINES OF LAW AND CORPORATE BROKING AND BELIEVES IT PROVIDES A PERFECT GROUNDING IN THE SKILLS NEEDED TO BE A CHIEF FINANCIAL OFFICER. “I HAD THOUGHT FOR A LONG TIME ABOUT GOING INTO INVESTOR RELATIONS AS A ROUTE INTO A COMPANY,” HE SAYS. “WITH MY CITY BACKGROUND, IR WAS A VERY, VERY GOOD ROUTE TO GET INTO A COMPANY.”
His career change came after leaving Deutsche Bank, having progressed through roles as a solicitor and corporate broker. He joined software group Temenos and after three years there as head of investor relations and strategic projects moved to become head of IR at gaming software and services provider Playtech. “I think IR is very much company-specific in terms of the role,” he says. “It can be an amazing job if you are inside the tent. You have to be incredibly close to the chief executive, chief financial officer and ideally also the chairman and really have your finger on the pulse of the business and be a valued person within that business.
“If the role itself and you as an individual are not valued, it’s a very bad job because you’re then on the outside and it just doesn’t work. You’re permanently exposed as a person; that’s IR at its worst.”
Smith says he was attracted to Temenos as he thought it was the sort of company where he could really make a difference. “It was a very entrepreneurial company where you could get your hands dirty,” he recalls, “and when I was approached by Playtech, which had been one of my clients at Deutsche Bank, I knew the gaming and leisure sectors and thought that it would be the same there. I definitely would not have joined a company where I thought investor relations was not valued.
“I would not say that I had mapped out my career path to becoming chief financial officer but I certainly knew that once I had got in there I would be able to add value, given that I knew the company very well and had a background in the sector. I knew that I would be able to add value right from the start and it just progressed from there.
“The access that you get in investor relations to the senior management team is unbelievable. You can also turn up to any overseas office and be seen as an important person in the business. Any C-Suite executive, by their very nature, is interested in the share price so when you’re in IR and you have direct access to investors, they want to know what you have to say. It’s not so much that you have that access as the fact that you can use it to add value instantly.”
Smith chose to take on the entire IR function at Temenos and Playtech himself. “I could have had people working under me,” he says, “but actually I don’t really believe in big IR teams. Of course, very large companies have to have them but I think a company of a size to be in the FTSE 250 index or at the bottom end of the FTSE 100, should ideally only have one person in IR.
“At the times that you are really, really busy in the job, I would not want to delegate anything. And particularly around results, I think it is important that you drive it yourself rather than palm it off onto somebody else. And then in the quieter times, you probably don’t need anyone else anyway.
“Some companies have one IR person to speak to analysts and others to do other things. But ultimately unless you can see the complete picture and bring it all together, I’m not sure how you can do your job effectively. So I am normally very suspicious of any investor relations team that has got more than one or two people in it.”
“The very best investor relations people speak as if they are the chief executive. They give people confidence. I would recommend IR without a doubt to anyone looking for experience of quoted company life with a view to progressing to the C-suite”
Smith, whose wife is head of investor relations at housebuilder Barratt Developments, also believes that there is an increasing recognition among C-suite executives of the strategic importance of an effective investor relations function. He sees the role as distinct and separate from that of corporate communications and believes it is best filled by people from financial and City backgrounds, as opposed to pure communications backgrounds. “The role has been professionalised,” he says. “There used to be more IR lifers but I think the profession has been improved by lots of former investment bankers and people from other roles in the City going into IR. The overall quality of people in IR has definitely improved. I am not a fan of people without any City experience going into IR. It’s not so much the numbers as about understanding how the culture of the City of London really works. Talking to analysts and shareholders requires a particular skill set. You have to understand how they think and if you have never seen it at first hand I struggle to think that it can be learned over time.”
As for the progression from investor relations to chief financial officer, Smith believes the external-facing part of the role makes the transition very smooth for most effective IR professionals.
“It makes one part of the job easy for me because it’s essentially the job I had already been doing” he says. “At my first results presentation as chief financial officer, I was not nervous at all. Everyone said it was my first time but it wasn’t really. I felt that I had been doing it for the past two years.
“The very best investor relations people speak as if they are the chief executive. They give people confidence. I would recommend IR without a doubt to anyone looking for experience of quoted company life with a view to progressing to the C-suite.”
HEAD OF CORPORATE AFFAIRS, STRATEGIC PLANNING AND IT – SMITH & NEPHEW
HEAD OF CORPORATE AFFAIRS, STRATEGIC PLANNING AND IT
SMITH & NEPHEW 2014 – PRESENT
HEAD OF CORPORATE AFFAIRS
SMITH & NEPHEW 2011 – 2013
DIRECTOR, INVESTOR RELATIONS
SMITH & NEPHEW 2008 – 2011
DIRECTOR, UK CORPORATE BROKING
DEUTSCHE BANK 1994 – 2008
EY 1988 – 1994
PHIL COWDY VIEWS HIS THREE-YEAR STINT IN INVESTOR RELATIONS AS A VITAL STEPPING STONE TO HIS CURRENT POST AS HEAD OF CORPORATE AFFAIRS, STRATEGIC PLANNING & IT AT HEALTHCARE GROUP SMITH & NEPHEW.
He had come to the role after 13 years in corporate stockbroking and equity advisory work at Deutsche Bank and found an immediate synergy with his new job. “Corporate broking, advising companies and raising funds gave me an insight into how the stock market works and how investors think,” he says. “There was a lot of day-to-day engagement, which is a component of running an investor relations team and that was the skill I took to Smith & Nephew when I interviewed for the job as head of IR.
“You know about institutions. You know how they think about companies. You already organise roadshows, target investors and help with press releases and presentations so you have that part of it already.
“What I found when I started in IR was that you need to know a great deal about the company and think ahead more. When you do corporate finance, you don’t know what you’re going to be doing in a month’s time, whereas in IR at a big company you have to plan for at least the next 12 months. You know when results are coming up.
“Your career is really about what you do.Are you a problemsolver? If something unusual is given to you, can you tackle it, learn about it, analyse it and manage it? And do you do that
in a way that means that a senior person has it taken off their desk and sorted out?
“There’s a different mindset to it. Beyond that, it’s about understanding what best practice is and understanding where you work to apply it. Do you know who the analysts are? How do you keep them updated? Do you get the right information internally and if there’s an issue brewing do you know about it so you can influence the communications of it and do you have the ear of the CEO and CFO so you know and can shape their views on topics?”
Cowdy arrived at S&N, however, in 2008 when the global financial crisis was changing the City. He was in IR for about two years before moving up to head of corporate affairs, overseeing communications as well as IR. After another two years, he added strategic planning and government affairs as well as responsibility for IT on the group’s executive committee. He now has a wide and diverse remit but he sees it all stemming naturally from his background in the City and in IR. “It’s about your skill base,” he says. “I have an investor relations skill base so I can do that. Part of it is a communications skill base so I can then manage media. And some of investment banking is about strategy and how corporates behave so I can do the strategy piece too. But your career is really about what you do. Are you a problemsolver? If something unusual is given to you, can you tackle it, learn about it, analyse it and manage it? And do you do that in a way that means that a senior person has it taken off their desk and sorted out?
“At Smith & Nephew, I feel that I have built up that type of reputation and therefore something like IT, even though I don’t particularly have IT skills, is something I can handle as part of my ability to take on new disciplines and approach them in a structured, logical way.” This ability is also valued in general management, including senior roles such as chief executive or chief financial officer, he notes, with the ability to get things done ranking highly in the skill sets required. “Not everyone who enters IR wants to do that or, I suspect, can do that,” he adds “but quite a few people in the function would classify themselves as being able to get stuff done.” Cowdy therefore believes in making space for a development role within IR to give high performers an insight across the entire business, gaining close knowledge about how it operates and what does and does not work in it. “The job is intrinsically interesting in itself,” he says. “You’re constantly dealing with both the managers of the business in terms of your executive team and the business’s owners, the shareholders. “That means that the information you get and the discussions you have are about the big things that matter, the major decisions, key choices and big directions. All of that makes IR a very important role in a company.” As for how IR is changing, Cowdy believes it has become more strategic in nature, with the external focus of the role enabling it to occupy a key place as valued adviser to more internally-focused management teams. “It definitely helps with the bigger proposition,” he says, “because one of the things about an executive team is that there can be a temptation to focus too much internally as things that come to you arrive a little bit filtered.
“In IR, by contrast, you have to deal with the owners and the shareholders will be speaking to other companies all the time so have a very unfiltered and clear-eyed view of your company. By knowing how they think, you can be a great outside-in view of the world within your organisation, which a good executive team should value strongly. I think that’s one of the reasons why increasingly in companies IR and strategy are very closely aligned or cross-reference each other because in drawing up your own strategy you then know what the outside world thinks and what the trends are and that is very important.
“I definitely think that the strategic nature of IR has increased within the last ten years after the function professionalised itself thoroughly during the early 2000s. You now rarely come across the type of IR person you saw 20 years ago, when it was really about organising roadshows and facilitating. The head of IR should now be seen as extremely well-linked internally, with the words that they use very similar to the ones that the CEO and CFO are using.”
For that reason, Cowdy believes the path from IR to the C-Suite will become more widely trodden in the years ahead. “I certainly know that when Smith & Nephew has searched for CFOs, one of the things on the list that we’ve looked at has been how much interaction candidates have had with equity shareholders and the functioning of a public company,” he says. “It’s all part and parcel of the job and IR provides a fantastic grounding.”
“I definitely think that the strategic nature of IR has increased within the last ten years after the function professionalised itself thoroughly during the early 2000s.You now rarely come across the type of IR person you saw 20 years ago, when it was really about organising roadshows and facilitating.The head of IR should now be seen as extremely well-linked internally, with the words that they use very similar to the ones that the CEO and CFO are using.”
CHIEF FINANCIAL OFFICER – EVANS CYCLES
CHIEF FINANCIAL OFFICER
EVANS CYCLES 2016 – PRESENT
CHIEF FINANCIAL OFFICER
HSS HIRE 2014 – 2016
HSS HIRE SERVICE GROUP 2011 – 2014
GROUP FINANCIAL CONTROLLER
HSS HIRE SERVICE GROUP 2008 – 2011
ACTING FINANCE DIRECTOR
HSS SERVICE GROUP 2008 – 2009
SENIOR HEAD OF FINANCE
THOMSON REUTERS 2006 – 2008
HEAD OF US INVESTOR RELATIONS
REUTERS 2004 – 2006
SENIOR EQUITY ANALYST
SG SECURITIES 2000 – 2004
TEATHER & GREENWOOD 1999 – 2000
MANAGER, FINANCIAL PLANNING AND ANALYSIS
CABLE & WIRELESS 1998 – 1999
AUDIT TRAINEE TO SENIOR ACCOUNTANT
ERNST & YOUNG 1994 – 1998
STEVE TROWBRIDGE CHOSE INVESTOR RELATIONS AS A TRANSITIONAL POST TO FORM A BRIDGE BETWEEN THE CITY AND A RETURN TO ROLES IN COMMERCIAL BUSINESS.
That’s exactly how things turned out for the chief financial officer of privately-owned retail chain Evans Cycles and, although he spent less than two years in the IR function at news organisation Reuters, Trowbridge sees it as a key link between the various parts of his career. “Even though I am in a private-equity backed role today, a lot of the things I learned and developed in the IR role around stakeholder management are still highly relevant,” he says. “Back then, it was about dealing with public shareholders; today I am dealing with private equity shareholders, but you go through the same way of thinking it through and scoping it out.
“Investor relations is not necessarily a direct route to a private equitybacked role but there are lots of common elements. IR gives you very high level access to management in an organisation at a very early point in your career. You do spend a greater proportion of your time with senior management than you otherwise would and you are exposed to issues that they are debating, discussing and worrying about.”
Trowbridge believes investor relations can be a valuable training ground for life in the C-Suite, providing professionals with a high level of exposure to senior management and a breadth of understanding of how their businesses operate at an early stage in their careers. He believes a spell in IR accelerates peoples’ understanding and learning and gives them a chance to grapple with issues they may not otherwise come into contact with until reaching a more senior level. “It also gives you a very early experience of how to frame your story and your message: what you do say and also what you don’t,” he says. “It helps with structuring and delivering presentations and it’s very good at helping you get clarity of thought. It forces you to consider how other people will see and interpret what you are saying. That’s a great skill to have inside any business.”
When coaching young professionals now, Trowbridge uses the way his career developed to help them plan their own. He recalls that, although he always had the ambition of ending up in a C-suite role, he never mapped out the route in detail and says he has still not decided whether he wants to stay as a finance director or one day move to become a chief executive. At present, he is highly fulfilled in the CFO role. “I have had opportunities that have come my way that at each step have helped me on with the journey towards whatever that eventual goal might be,” he discloses. “And at each stage, I have either been acquiring some new skills or consolidating what I have and building some more. But I never sat down and consciously planned the next step and thought about what skill might be needed for it. Things just came across my desk at the point where I felt it was a good time to move.” Trowbridge also advises IR professionals with ambitions of entering senior management to ensure that they do not get stuck in one function in the early parts of their careers. In particular, he warns that people who aspire to have positions in the C-Suite need to take care that they do not spend too long in IR.
“In your next role, you will not typically replicate the exposure, high level involvement and travel that you get in IR,” he says. “So if you have been used to that for a long period of time, it can be harder to step away from it. I would encourage someone who is using IR as a stepping stone or is still at a stage in their career when they think they might step away from it to think carefully about what to do once you have gone through a couple of annual reporting cycles.”
“investor relations can be a valuable training ground for life in the C-Suite, providing professionals with a high level of exposure to senior management and a breadth of understanding of how their businesses operate at an early stage in their careers.”
Working out how long to stay in such a role is key, Trowbridge believes, since the centrality and power of IR means that it can be much harder to step away after five to seven years than after just two. “It does depend on where in your career your spell in IR comes,” he adds. “But if it is early on, think carefully about how long you spend there because there are other skills you need to acquire. If you aspire to being a CEO, CFO or COO down the track, I think you have to be very careful to identify how long you do the IR role for
“If you aspire to being a CEO, CFO or COO down the track, I think you have to be very careful to identify how long you do the IR role for.”
2011 – PRESENT
AMICUS 1993 – PRESENT
GROUP DIRECTOR OF CORPORATE AFFAIRS
REXAM 2010 – 2012
DIRECTOR, INVESTOR RELATIONS AND GROUP PLANNING
GALLAHER GROUP 1997 – 2007
CONSULTANT IN INVESTOR RELATIONS
1992 – 1997
LAING AND CRUIKSHANK 1985 – 1992
CLAIRE JENKINS HAS MADE THE UNUSUAL TRANSITION FROM INVESTOR RELATIONS TO A SERIAL NON-EXECUTIVE DIRECTOR AND BELIEVES IT IS A CREDIBLE AND HIGHLY VIABLE CAREER ROUTE FOR AMBITIOUS INVESTOR RELATIONS PROFESSIONALS.
By its very nature, however, a NED role requires flexibility, versatility and an ability not to be constrained by narrow borderlines. Jenkins is therefore a strong advocate of gaining as wide an experience as possible in a career and believes it is never too early to begin that journey. And she is no stranger to standing up for what she believes and asking for what she wants.
A non-executive director at the Media for Development organisation and until recently also at sports retailer Sports Direct International, Jenkins’ portfolio has long included being a trustee at Amicus, the UK-based charity that helps provide legal representation to people on death row in the US. However, she began her career in the City as a stockbroker, joining Laing and Cruikshank straight from the University of St Andrews as one of only two female professionals at the firm.
Her corporate broking experience provided an obvious platform to move into IR, initially as a consultant. Then, after seven years advising other corporates, she was given an opportunity to join UK tobacco company Gallaher Group, which was being spun off from American Brands. “I was lucky to set off in in-house IR ahead of an IPO,” she recalls. “Straightaway, I said I wanted to get more involved, for example in AGMs. Most IR professionals didn’t at the time.”
Jenkins’ job developed into that of Gallaher’s director of IR and group planning and she believes Gallaher’s culture of allowing professionals to move across the company’s different disciplines was a key contributor to her career development. “You need to stick up your hand and force yourself into new opportunities,” she advises. “I grabbed everything with both hands. But I was kicking against an open door.”
Jenkins joined the transaction team as well as becoming involved in broader corporate communications messaging. She also ended up running strategic away-days for Gallaher’s board, coming up with the idea to ask managers to give presentations as though they were chief executives of the company’s competitors explaining how they were going to beat its rival. “For any cross-functional project I’d volunteer my time,” she recalls. She advises ambitious investor relations individuals to do their own PR and make themselves useful throughout their organisation.
“You need to stick up your hand and force yourself into new opportunities.I grabbed everything with both hands.But I was kicking against an open door.”
At Gallaher, she would go through brokers’ notes on the group’s competitors and drop the relevant managers a one-liner highlighting their thoughts. “Investor relations and corporate communications is unfortunately a classic non-revenue generating function that 90% of commercial people think is a waste of space,” she says. “But if you can develop good relationships throughout the business and help people do their job, it’s a win-win.”
After ten years at Gallaher, Jenkins joined cans manufacturer Rexam as group director of corporate affairs in 2010, partly attracted by opportunities to get involved with other areas of the business. “Many of the IR roles on offer bored me to tears,” she admits. “I’d done so much and been so heavily involved on the corporate communications side. I realised I needed a ‘head of all communications’ type role.” Rexam reshaped corporate affairs under Jenkins, removing investor relations from the role but adding the rapidly developing area of corporate sustainability. “I could demonstrate that I wasn’t just a one-trick pony and could get involved with a new area,” she says. “You have to deliver. You have to be prepared to make yourself visible. But it’s also important that you have faith that you can learn from everything you do, including your mistakes. No one gets to the top without making mistakes.”
Sports Direct was Jenkins’ first NED role, joining Mike Ashley’s retailer in 2011. “I moved into plural roles sooner than I expected,” she admits. “Getting your first NED role is the hardest. Almost everyone wants someone with previous board experience. It’s doubly hard now because the pool of executive directors has shrunk so much. There is a very different dynamic between the executive committee and the board. Board level discussions think bigger picture. That’s what you need to move into a CEO or executive role – the vision to think about the company as a whole and what is best for it.”
Jenkins views investor relations and corporate affairs as perfect springboards to other executive and non-executive roles as part of an excellent strategy for ambitious professionals to reach the top. However, she warns: “You won’t move from head of any function to CEO straightaway. You need a true understanding of the issues a board faces, such as financing and balance sheet requirements, and the nuts and bolts of what is involved.”
It is not a conventional career path or one that is clearly signposted. Jenkins advises those wishing to follow it to focus on demonstrating a sound understanding of business as well as the ability and eagerness to participate in cross-functional and strategic teams. A positive attitude in this regard can enable professionals to win the trust and support of colleagues and seniors. But it also requires individuals to be assertive self-starters. “Whatever the job description is, tear it up. Make it your own,” Jenkins advises. Nobody can accuse her of not having done that in her own career.
“ Ambitious investor relations individuals need to do their own PR and make themselves useful throughout their organisation.”
CHIEF OF STAFF TO THE CEO – VODAFONE
CHIEF OF STAFF TO THE CEO AND HEAD OF INTERNAL COMMUNICATION AND EVENTS
VODAFONE 2016 – PRESENT
DIRECTOR OF EXECUTIVE AFFAIRS
MITIE GROUP 2014 – 2016
HEAD OF CORPORATE AFFAIRS
MITIE GROUP 2013 – 2014
HEAD OF INVESTOR RELATIONS AND EXTERNAL AFFAIRS
MITIE GROUP 2009 – 2013
INVESTOR RELATIONS AND EXTERNAL COMMUNICATIONS MANAGER
MML CAPITAL PARTNERS 2009
INVESTOR RELATIONS MANAGER
QANTAS 2004 – 2008
ERICA LOCKHART STARTED HER CAREER AS A FINANCE GRADUATE, WORKING IN STRATEGY FOR TWO YEARS BEFORE MOVING INTO INVESTOR RELATIONS. NOW SHE IS CHIEF OF STAFF TO VITTORIO COLAO, CHIEF EXECUTIVE OF VODAFONE, WHERE SHE ALSO HEADS THE MOBILE TELECOMS GROUP’S INTERNAL COMMUNICATIONS AND EVENTS OPERATIONS.
“I had no idea of where I wanted to get to when I started out,” says Australian Lockhart.
“I was offered a job at Qantas and thought it would be fun. I was supposed to become a qualified accountant as part of the company’s graduate programme but I spent six months working in group reporting and knew I would never want to work as an accountant so I ended up working at the group’s strategy unit. It was an exciting time as Qantas was launching a low-cost airline and dealing with £100-a-barrel oil.”
The move into investor relations came after a strategy team colleague moved to head up the function. “It seemed interesting and a nice mix of skills,” says Lockhart. After a career break to travel the world, she moved to London, arriving in the midst of the financial crisis one week after the collapse of Lehman Brothers. She worked in investor relations in private equity and then at FTSE 250 outsourcing specialist Mitie Group, where she progressed to be head of corporate affairs and then director of executive affairs. “I arrived as an investor relations manager but on day one they said I was going to do public relations as well,” she recalls.
Working closely with Mitie chief executive Baroness Ruby McGregorSmith, her remit stretched from internal communications to managing the group’s website and handling government affairs, events and branding. For the last two of her seven years at the company, she also took on a chief of staff role, spending 90% of her time with the CEO. “It was an incredible learning experience,” she says. “I had already spent a lot of time with her in an IR and communications capacity but expanding that to be involved in basically everything she was doing really rounded out my knowledge on the company as I was seeing the whole picture. I sat on the executive committee and sat in on plc board meetings. I was also in most of Ruby’s meetings. It was quite an ad-hoc role picking up some very different projects. It helped me develop a very distinct skill set because I just had to be able to find solutions to anything. Things were different every day.”
Lockhart left Mitie when McGregor-Smith signalled she was stepping down. She was then approached by Vodafone to take on the chief of staff role to chief executive Vittorio Colao and also be head of internal communications and events. Her route to her current position has given her a vantage point to observe the role of IR and the benefits it confers in terms of access to the C-Suite.
In addition, it informs her belief that investor relations is becoming more strategic in nature in the way that companies are directed and run.
“The thing I enjoyed the most about IR was that you get a really good perspective of the business from the shareholders’ point of view,” she says. “And as I developed a really good relationship with the CEO and her senior team, I got increasingly involved in a lot of serious and really big discussions about where the group was going. I knew the business inside out and was involved in all the internal discussions about the business strategy and I represented the shareholders’ perspective on what the company was doing. I think when you have the right relationships within a company, IR is an amazing role in its ability to help shape and influence strategy and some of the big long-term decisions. I think you can become a key adviser to the management team as opposed to someone who simply delivers IR services. The challenge is when will it be formally seen as that. I don’t know the answer. To me, it feels like something that is very personality-dependent. If over time you build a level of trust and have a good rapport with the CEO and CFO, I think it will naturally happen but I don’t know if it would always happen. It will depend on the mix of personalities you have.”
That kind of role can clearly become intense. Lockhart says that by the end of her time at Mitie, she was included in discussions on pretty much every aspect of the company. “I felt consulted on almost everything that went on in the company that the CEO touched or influenced, although that was never in the job description,” she says.
“ultimately you will have to take a step down in terms of access if you want to go and do different broader roles in the business.”
“I would be at meetings with her and with our advisers, talking about major strategic decisions. I was brought in on everything and felt like a very trusted part of the team.”
As for advice to current IR professionals with ambitions to progress further, she believes the most important thing is to invest in forging close relationships with executive committee and board members. “You need to use your central position and access to develop relationships beyond the CEO and CFO,” she says, “because ultimately you will have to take a step down in terms of access if you want to go and do different broader roles in the business.
“If you have the backing of one of the managing directors, that’s the best route to do that.”
FORMER ACTING CHIEF FINANCIAL OFFICER – LADBROKES
ACTING CHIEF FINANCIAL OFFICER
LADBROKES 2016 – 2017
DIRECTOR OF INVESTOR RELATIONS
LADBROKES 2014 – 2016
MANAGING DIRECTOR, CORPORATE BROKING
BANCO ESPIRITO SANTO 2014
MANAGING DIRECTOR, CORPORATE BROKING
NOMURA 2011 – 2013
GROUP DIRECTOR, INVESTOR RELATIONS
VODAFONE 2006 – 2011
GROUP DIRECTOR, MERGERS AND ACQUISITIONS
VODAFONE 2006 – 2007
GOLDMAN SACHS 2004 – 2006
MERRILL LYNCH 1996 – 2004
CHARTERHOUSE BANK 1993 – 1996
ARTHUR ANDERSEN 1988 – 1993
RICHARD SNOW READ NATURAL SCIENCES AT CAMBRIDGE AND AT ONE POINT PLANNED AN ACADEMIC CAREER BUT INSTEAD HE TRAINED AS A CHARTERED ACCOUNTANT AT ARTHUR ANDERSEN TO GAIN A SOLID UNDERSTANDING OF FINANCE BEFORE EMBARKING ON A CAREER IN INVESTMENT BANKING AND LATER MOVING INTO INDUSTRY.
Given his strong City background, Snow moved immediately to mergers and acquisitions on arrival in his first corporate post at Vodafone, sealing a major deal in India. However, after one year, he was given the opportunity to lead investor relations to gain a thorough grounding in the business.
“One of the big challenges in moving to a new industry and really understanding it is that it is really tough unless you have come up through the ranks,” he says, “As a banker, our clients were chief executives and chief financial officers and they always knew more about their industry than a banker ever could. What we brought was an ability to get a deal done; to finance it, shape it and sell it.”
Snow got his chance to develop such knowledge when Vodafone’s IR director was moved to a new role and Arun Sarin, then Vodafone chief executive, offered him the job as a transitional role.
“My reaction was: ‘What have I done wrong?’ he recalls. “He said: ‘Nothing. I like you.’ I said: ‘I know nothing about IR” and he said: ‘Hell, you’ll be great at it and I want you to do it because I am CEO’. What I then discovered is that in IR you get access to every cupboard at the company.
“Investor relations professionals who see their careers as being in general management should consider taking a sideways step out of IR before getting on the upward trajectory again”
“You have a huge number of people who want to help you and a huge layer of middle management who want to get investor exposure to develop their careers and City insights to understand how business works at the very top level. And of course you get a great relationship with the CEO and CFO but it is really about the insight and seeing how the business ticks.”
He stayed in the role for four years and says he loved it. Then after a brief spell back in banking, he went to betting leader Ladbrokes as director of investor relations. He had leisure industry experience, helping buy hotels and divest Coral for Hilton plc, Ladbrokes’ previous owner and, once again, found the IR role as an effective way to get to know the business, redesigning its external reporting, planning and IR strategy and bringing heavy weight insight to the Board.
After Ladbrokes announced its merger with Coral, he was made interim CFO from December 2015 to April 2017, when he left the company. “IR gives you a really good understanding of how businesses work and how finance and reporting works,” he says. “At Vodafone I sat on the group finance committee which helped me build relationships across the entire finance function. It gets you focused on what you need to do and it helps you when you’re representing 80,000 people at Vodafone or 25,000 people at Ladbrokes to know what makes a business work.
“Being effective in IR definitely provides you with some of the skills to be a future chief financial officer candidate”
“It gives you huge practice at presentation skills, diplomacy and shareholder management and it should give you enormous insight into the business, its sector, strategy, competitive environment and how to really govern the business.”
Looking at the investor relations world, however, Snow sees it as “massively fractured” between people who are boxed in IR and those who are on more structured career paths to wider and more senior management positions. “I think there is still huge division across company boards as to whether IR is a glorified presentation job or the first line of defence for the Board and CEO,” he says. “The latter view is much more advanced in America and Europe than it is in the UK. So IR is helpful to a career in general management but by no means does it provide some kind of shoo-in.
“You’re still very much viewed as a specialist operator and the risk is that you get pigeon-holed as just an IR expert.”
Because of this problem, Snow advises investor relations professionals who see their careers as being in general management to consider taking a sideways step out of IR before getting on the upward trajectory again.
“Being effective in IR definitely provides you with some of the skills to be a future chief financial officer candidate,” he says. “And most future CFO candidates don’t have those skills. If you come up through the financial controller route, for instance, it’s very rare that you also have the broad strategic, treasury, corporate finance, City and merger and acquisition skills that investor relations experience can bring. But it also depends on what kind of IR professional you are and whether your CEO has you inside or outside the room.”
Such skills give huge potential for IR professionals to become highlyvalued strategic players within organisations and Snow sees a movement towards that.
“I think it is happening in places,” he says. “But the classic UK CFO is still very protective of his or her patch. If you’re in a business in total flux, like Ladbrokes was when I joined, it can be incredibly helpful but you have to have a CEO and CFO who are open to listening to the City, even when the views were negative. That’s where the IR function works well and something that made the Ladbrokes role particularly enjoyable. Where it doesn’t work is where a CEO is closed to the fact that he or she is failing and doesn’t want to know what anyone thinks and you are usually the bearer of bad news. In that sort of situation, I shouldn’t think that the CEO imagines for one minute that you could step up. And your big challenge is also that if you are really good at IR, he or she may not really want you to move. But where a CEO wants to know what people are saying, why they are saying it and what other businesses are doing, you become a huge source of information and enormous value.
FINANCE DIRECTOR – SOUTH EAST WATER
SOUTH EAST WATER 2015 – PRESENT
GROUP FINANCIAL CONTROLLER
MANCHESTER AIRPORTS GROUP 2013 – 2015
DEPUTY CHIEF FINANCIAL OFFICER
DOOSAN POWER SYSTEMS 2009 – 2013
INVESTOR RELATIONS DIRECTOR AND DIVISIONAL FINANCE DIRECTOR
CSR 2006 – 2009
INVESTOR RELATIONS DIRECTOR
MISYS 2003 – 2006
ASSOCIATE DIRECTOR, CORPORATE BROKING
HSBC INVESTMENT BANK 1999 – 2002
AS A CORPORATE BROKER, ANDREW FARMER SAW HIMSELF AS THE EYES AND EARS OF CLIENTS IN THE MARKETPLACE. HE TOOK THAT APPROACH TO THE INVESTOR RELATIONS ROLE AFTER JOINING IT GROUP MISYS AND BELIEVES THAT THE DEEP INVOLVEMENT THAT THE FUNCTION PROVIDES IN THE EXTERNAL PERCEPTIONS OF A COMPANY MAKE IT A PERFECT PROFESSION IN WHICH TO PREPARE FOR A FINANCE DIRECTOR’S ROLE.
“My ambition was always to be chief financial officer of a significant entity,” he says. “I didn’t know what sector it was going to be in or whether it was going to be publicly-listed or owned by a private equity group but I had my sights firmly set on eventually being a CFO.
“When you make the transition from the City to a corporate job, you think you surely must have all the qualifications to be at least a divisional CFO within a fairly substantial enterprise.
“But once you start meeting people, you realise that they’re looking for a slightly different skill set and although investment banking equips you with some great skills, for me it was not necessarily perfect for making that immediate transition to being a CFO. So the logical next move in my career was to move into investor relations.”
“I had made the decision before starting in IR that it was not where I wanted to end my career.It’s a perfectly legitimate career path for people to follow and I understand that.But I guess I just wanted to get to the boardroom table. Having done a chartered accountancy qualification, there’s always a natural desire to be a finance director.”
At Misys, Farmer became the first ever IR director of a FTSE 250 company undergoing a major upheaval amid investor scrutiny of both its corporate governance and acquisitions history as well as demands for greater transparency. After the Misys IR role, which also included interim responsibility for corporate communications, Farmer was offered a move into line management but decided to leave for CSR, another FTSE 250 IT company. “It was another IR director role but always on the day one premise that I would move into a divisional finance role and that’s exactly what I did,” he says.
At both Misys and CSR, Farmer reported directly to the company’s chief financial officer and he advises aspiring IR professionals to seek the same structure.“It means you can go in and prove yourself to that CFO but it’s also important to select an organisation that’s willing to move people around, give people a chance and not be risk-averse,” he says.
“I wouldn’t have gone to an organisation where IR reported into corporate communications. I wanted to get close to the CFO and I wanted the CFO to appreciate that I had broader skills than just doing IR so that someone would give me an opportunity to do a wider finance role.
“I had made the decision before starting in IR that it was not where I wanted to end my career. It’s a perfectly legitimate career path for people to follow and I understand that. But I guess I just wanted to get to the boardroom table. Having done a chartered accountancy qualification, there’s always a natural desire to be a finance director.”
Farmer got that chance in his next role as deputy chief financial officer at South Korea’s Doosan Power Systems and he stayed in infrastructure after that as financial controller of Manchester Airports Group and in his current job as finance director of South East Water.
At this £230m-turnover utility, he sits on the executive committee and main board and has responsibility for finance, IT and systems, legal, procurement, property and investor relations.
“The company is owned by private equity,” he says, “but it has listed bonds and a securitised debt structure so there’s a big piece of investor relations there.” Farmer believes that coming to major finance roles through the IR function equips professionals with a different skills set to other routes. “I think you’ve got a much better feel for the complexities and interdependencies of stakeholder management,” he says.
“You can sit at the board table, with first-hand experience of what investors are likely to be looking for and a good understanding of what matters to other financial intermediaries, such as banks and rating agencies. If you come through a pure finance route, I think it’s harder.”
He does, however, advise IR professionals with ambitions of taking finance director roles to gain experience in divisional posts.
“Things like how to build spreadsheets and how to build financial models had not been required in IR or corporate broking, so to understand that was important for me,” he adds.
“But there’s a real risk that if you just go up the finance route, you can become very specialised and lack appreciation of how all the different stakeholders of a company interact. I certainly got that experience by coming through the IR route.”
He believes IR is becoming more strategic to the overall management and direction of companies and will increasingly require a rounded set of skills. “If I was looking to appoint an IR director, it would be extremely important to me to find somebody with excellent relationship skills,” he says.
“It would also have to be someone who could read a balance sheet, understand the capital markets, and have the capability to understand and challenge the strategic direction of the organisation. Our investor relations director has a very good view of the strategic direction of our industry and knows what investors are looking for. We tailor our message and offering to that.”
GENERAL MANAGER, THE INVESTOR RELATIONS SOCIETY
THE IMPORTANCE OF OWNING YOUR CAREER: FROM INVESTOR RELATIONS TO BUSINESS LEADERSHIP
ONCE UPON A TIME, TO BE A BANKER, YOU WERE EXPECTED TO DO BANKING EXAMS UNDER THE VENERABLE CHARTERED INSTITUTE OF BANKERS, APPROPRIATELY LOCATED IN LOMBARD STREET, THE HOME OF BRITISH BANKING FOR SOME 400 YEARS. WHILE LOMBARD STREET IS STILL THERE WITH ITS BANKING SIGNAGE STILL IN PLACE, THE INSTITUTE IS NOT AND I’M NOT SURE WHAT HAPPENED TO THOSE TRIED AND TESTED BANKING EXAMS.
Today, perhaps more than ever, you need to own your career and take charge of your professional development rather than expect a given rite of passage. For the IR Society, the UK’s professional body for Investor Relations (IR), we too take professional development very seriously.
First, will the perfect IRO stand up please? I think it’s fair to say that we are all under increasing pressure to respond to a heady mix of changes in our marketplace, be it structural, economic, geopolitical, regulatory, technological or just more competition for capital. The world is indeed changing and we must change too.
What is also increasingly clear is that IR is a career in its own right and some of the best known IROs have indeed carved out a long career in this specialist field. At the same time, what IR offers a competent practitioner is more than just the often taken-for-granted market knowledge and technical skills, as important as these are in a regulated environment, it is also the wherewithal or gravitas to lead. And we are seeing this, as this industry report, ‘From Investor Relations to Business Leader’, shows. The invaluable and sometimes unique experience that IR can bring together in a person or in a team does lend itself to positions of leadership, whether in IR or elsewhere.
The IR Society expects to remain at the forefront of our industry by acting as a focal point for the IR profession. We will ensure that we have a voice where it matters with listed companies, the broader investment community, government, regulators, the media and even your bosses. In this way, we can stay as relevant as we can possibly be and not lose sight of who we are and what we can offer, no matter what the prevailing trends. A key part of this must be to further develop our profession in a way that works for our members and industry.
We recognise that IR should offer a clear path to further career development and this is what the Society’s new Diploma in IR and the DELIVER (Developing future leaders through IR) programme aim to do. The Diploma will build on the success of the CIR, with more advanced options to be available in the very near future. In considering the ethical element, given the Society’s recent introduction of a Code of Conduct for members, we expect senior IR practitioners to be fully tested. We believe that this should include the softer aspects, such as defining qualities of the best IROs, presentation skills and leadership. Coupled with activity-based learning of the DELIVER programme, the Society firmly believes that high potential IROs can take the next step up in their careers through timely exposure to captains of industry, the C-suite and collaborative peers in a highly participative, risk-free training environment.
In continuing to develop our professional development offering, the Society aims to raise the profile of the best people we have to offer the profession and industry more broadly. In doing so, the Society can play our part in leading the development of best practice in IR. In turn, we would expect the likes of those individuals featured in this exciting report on successful career progression to champion our industry as they move into more senior roles. We wish them all the best in their endeavours.
Let us conclude by celebrating this very important industry report, ‘From Investor Relations to Business Leader’. All careers are personal journeys. When we think of professional development, we often think of continuous improvement (or a Continuous Professional Development process that we support) and a willingness to test yourself and stay at the top of your game for as long as possible. It does require time, commitment and staying power. It also requires belief in yourself to manage your own career and get the right support. It is, therefore, most timely to work in association with Broome Yasar Partnership on this report into how some of our IROs have succeeded in leadership. The world needs leaders and IROs are in as good a position as any to assume these elevated positions. Onwards and upwards, all of you, we look forward to sharing your ascent to the top of IR and beyond!
The Investor Relations Society
From Investor Relations to Business Leader:
The Pathway to CEO?
EVEN FIVE YEARS AGO IT WAS NOT COMMON TO ENVISAGE INVESTOR RELATIONS PROFESSIONALS AS FUTURE BUSINESS LEADERS. THOUGH IT HAS LONG BEEN REGARDED AS A USEFUL WAY OF KEEPING THE EXTERNAL STAKEHOLDER BASE ENGAGED AND IN SOME CASES PACIFIED, IR WAS, AND, IN MANY CASES, IS STILL OFTEN REGARDED AS LACKING A DIRECT LINK TO REVENUE GENERATION. PERHAPS FOR THAT REASON, IT HAS BEEN DENIED A PLACE AT THE STRATEGY TABLE AND IS SEEN AS INCAPABLE OF CONTRIBUTING TO BROADER BUSINESS DECISIONS. IN THE SEARCH FOR LEADERS WITH THE DEPTH AND DIVERSITY OF SKILLS NEEDED TO RUN OUR LARGEST, MOST IMPORTANT COMPANIES, INVESTOR RELATIONS DEPARTMENTS HAD NOT BEEN CONSIDERED FRUITFUL PLACES TO EXPLORE. BUT THINGS ARE CHANGING.
There are some valid reasons for this historical oversight. Investor relations departments have typically been small and isolated from the engine rooms of the companies they represent. And, though they have envied access to the chief executive and chief financial officer, they rarely sat on boards. Other functions such as finance were viewed as a more natural route, due to their ability to dissect operations, apply financial acumen and manage resources. Lacking direct attribution to corporate successes and commercial benefit, investor relations was overlooked as a source of talent by executives considering succession planning.
A rapidly changing market for senior roles is challenging this status quo. A new generation of leaders have developed their skills and outlooks in a digitally-connected, always-on world. Dramatic increases have taken place in the speed at which information is exchanged and in the networks and platforms where this takes place. In addition, a welter of post-financial crisis regulation and the rise of the activist shareholder means that corporate life involves many more potential pitfalls. All this means that investor relations is no longer a minor but necessary aspect of corporate life. With an ever-greater complexity of audiences and stakeholder groups, CEOs have no choice but to be closely connected with how their investors think and how they and their company are perceived in the external world.
This is the job of the modern investor relations professional. The role has developed to the extent that its practitioners are in effect proxies for the chief financial officer and the CEO in the external stakeholder environment. This brings both opportunities and risks. With role models who have progressed from IR roles to lead major organisations, the path is becoming better laid-out, signposted and supported. With this comes a higher profile, an increasingly pressurised role and high levels of personal exposure and isolation, with IROs experiencing some of the loneliness at the top.
In our large-scale survey of investor relations leaders, in which more than 150 IROs participated, nearly a third of those questioned strongly agreed that investor relations can be a stepping stone into a broader business leadership role and that they were on the right path to achieve this within the next five to 10 years. Encouragingly, nearly two thirds believed their company was supportive of the transition into a wider leadership role from investor relations. Nevertheless, more than half said a greater awareness of the importance of IR within the wider company was needed, pawrticularly a greater understanding from HR as to the merits of today’s IR leaders.
TRANSLATE INVESTOR RELATIONS SKILLS INTO MANAGEMENT TALENT
While the path from IR roles to general management and leadership positions has been pioneered by the individuals we have profiled, it remains virgin territory at many organisations.
The good news is that for professionals who are keen to reach the top, their wide-angle view of an organisation, core skills of engaging and making people believe and their ability to articulate and deliver a message are increasingly in demand. There’s huge potential for such individuals to succeed.
As a result, we are witnessing more investor relations figureheads developing into business leaders. Many investor relations directors now sit on executive committees. IR is emerging as a business-critical function and as a valid and respected management discipline. Furthermore, it is increasingly common for potential business leaders to be expected to spend some time in the investor relations function.
It is unsurprising that the range of skills required in an IR role can translate effectively into management talent. Through their everyday tasks, investor relations professionals are honing core CEO skills such as the ability to build a narrative, remain calm in a crisis, multi-task, think fast, communicate succinctly, listen to the external stakeholder environment, deal with challenges and be ready to fix weaknesses and adapt corporate strategy
DEVELOP BROADER SKILLS IN COMMERCE, FINANCE AND OPERATIONS
Investor relations skills alone are not sufficient to progress professionals into senior executive roles. While IR is increasingly attracting people with broad skill-sets from diverse backgrounds, a need remains for professionals starting in the industry to proactively widen their portfolios. Without commercial acumen and financial management knowledge, an ambitious IR professional may find it difficult to progress across departmental barriers.
BROADEN YOUR BUSINESS PORTFOLIO
Interviewees for our report stressed the importance of volunteering for new opportunities and wider involvement throughout an organisation. Managerial training at institutions such as business schools and MBAs can help fill financial “gaps”, while there are many opportunities to gain experience through volunteer board roles.
By gaining cross-functional and broader experience, and becoming involved in wider strategy deliberations, many IR professionals have found their profiles raised and efforts being rewarded by increased interest externally.
PROFESSIONAL DEVELOPMENT - UNDERSTANDING, APPRECIATING AND VALUING YOUR OWN 'PERSONAL BRAND'
Our report and the case studies highlighted show that the common thread which runs through nearly all of these examples is their ambition and brand. This is coupled with a core career growth objective and an innate understanding and belief in their own brands and the power to communicate these messages.
Our sister company, Moss Perform, who focus on executive and leadership coaching, acknowledge the importance of personal brand awareness. They stress change: small, profound, positive or negative. Every time we face change the parameters are re-set and we need to adapt our thinking, our behaviour, our strategy. Success comes from having the tools to make the best out of it and the confidence to seize any opportunities as they arise. And we find that coaching is the only discipline that provides executives with the bespoke framework and support in which to do this and grow.
With regards to your personal branding, you no longer have an outmoded CV. You’ve got a marketing brochure for you and your brand. Instead of a list of titles held and positions occupied, your personal brand brochure brings to life the skills you’ve developed, the strategic projects you’ve delivered and the achievements you want to take credit for. And, similarly, to any brilliant marketing collateral, yours needs consistent and constant updating to reflect your progress.
Our colleagues at Moss Perform, put it more bluntly. ‘We all know the decision to buy is an emotional one and in the end if you are not clear about what you are offering the buyer might miss it.”
IDENTIFY A MENTOR
Being vocal about one’s ambitions is of paramount importance. Most of our current crop of leaders admit to having had close senior support, including mentors who were prepared to guide and to challenge them into trying new roles. Consider a move to another organisation if that support culture does not exist within an existing employer. An open-minded environment is needed to facilitate and effect a career transition.
BUILD PERSONAL NETWORKS
The journey to executive leadership is not straightforward and it may be necessary or expedient to move sideways into a role that may not be high-profile or report directly to a chief executive or chief financial officer. Such moves can equip individuals with new skills, vastly improve their operational knowledge and help them make connections that may fuel future progress.
This can build personal networks and add direct experience of different functions, geographies and business areas to an executive’s communications prowess. Invaluable experience can also be gained from NED positions, though there remains concern that investor relations professionals are not often considered for such roles.
MAKE A PLAN
The individuals profiled show what is possible for talented investor relations professionals who work hard to fulfil boardroom ambitions.
At Broome Yasar Partnership, we are sure that the market will see more IROs making the transition to general line management and senior executive positions. But careful planning and ambition are prerequisites to tread the path to leadership.
For those who wish to travel in this direction, however, the good news is that the route is becoming well-established, there are signposts along the way and support now exists for the journey. Bon voyage.