Iowa Journalist Fall 2009

The University of Iowa

Investor relations has
fertile future

As economists note the country rebounding from an economic recession, companies large and small are going to need help communicating with their investors to bring profits back up. Enter investor relations.

woodywallace

Lunch with an Alum J-MC students interested in investor relations meet for lunch with Iowa alum, Sherwood "Woody" Wallace on Sept. 18. Photo by Mahmoud Lutfi

Investor relations, previously known as financial public relations, is a segment of the public relations field that practices the art of communicating with a company, the financial community and potential investors.

Sherwood "Woody" Wallace (B.A. 1962) has been working in the field since its early stages of development. Wallace has been involved in investor relations since 1967 and has co-authored a bestselling book on investor relations, "Competing in the New Capital Markets: Investor Relations Strategies for the 1990s," as well as, "New Dimensions in Investor Relations: Competing for Capital in the 21st Century."

He also received the first Golden Trumpet award ever given by the Publicity Club of Chicago for the public relations program he developed for automobiles when he was 26 years old. The Golden Trumpet award honors distinguished individual achievement of public relations and communications, and are presented for excellence in planning, creativity and execution.

Investor relations involve a combination of journalism skills and business skills. The journalistic abilities to write and communicate, coupled with the business knowledge of accounting and finance, create a field designed to help companies tell their story to potential investors.

"Executives know their company but do not know what goes on outside, and you can’t go into investor relations without knowing numbers," Wallace said.

After spending five years in marketing public relations, Wallace made the move to investor relations.

"In marketing public relations you are called upon to be so creative constantly, and I thought that wore you out," Wallace said. "It was always building something from scratch, and that was tremendous pressure. In financial public relations there were many rules that dictated the order and pattern of things, so your creativity could be limited to just a few areas, and it was not so essential or stressful."

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Making a Point - The ability to work with numbers Woody Wallace states is important to be successful in investor relations. Photo by Mahmoud Lutfi

The field of investor relations is a very fertile and very diverse subject area, according to Wallace. Account managers can be called upon to do an array of tasks involving communication with investors, clients, media, suppliers, bosses and associates.

They are also asked to do typical public relations tasks, such as working on letters to shareholders, producing news releases on earnings, fact sheets, pitching letters to investors or media and researching clients, investors and the stock markets.

According to Wallace, one area of investor relations that is sure to see a significant increase is the use of social media. Although Wallace does not personally see the reasoning behind the use of social media, he notes that it is a part of investor relations that the younger generation will use. The ability for companies to reach their target audiences, especially as blogging and online communication becomes the norm, will rely heavily on an individual’s ability to utilize the social media tools.

Wallace believes that the future for investor relations is bright. Within large companies, people working in investor relations will need to become strategic thinkers and be extremely knowledgeable of a company or clients. Also, those working in investor relations will need to think more globally, travel overseas more frequently and be able to deal in multiple languages.

"Both companies and investors will need more help than ever in the current financial markets," Wallace said. "The crash of the past two years will cause investors to be more selective and skittish. A company’s credibility will be the most important thing, as well as the chief executive officer’s credibility. Investors must be able to trust him and the company."

In the future, Wallace said that online resources such as Facebook, MySpace and Twitter may offer opportunities for groups of investors to exchange ideas. The next generation of investor communications is still in its early stages, and the extent the prevalence of some of the new technologies has yet to be seen. However, the abilities of the next generation to use these tools will be a vital aspect to investor public relations.

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