Investor Relations

30INVESTOR RELATIONSLet us now spend some time on assessing what makes a strong InvestorRelations function and what are the pitfalls to avoid when setting up andstaffing an IR department.2.3.1 A Flexible and Scalable Investor RelationsOrganizationThe size of a company, whether it is measured by its market capitalization,its free float, or its revenues, often directly impacts the size of the team andof the budget allocated to Investor Relations. It can also be a function of itscapital market experience, of the complexity of its story, and of how globalits Investor Relations program is.Financial information must consistently beof the same quality in terms of content and form, regardless of the circumstances.This requires an organizational structure that is flexible enough tobe adapted to changing regulations, market expectations, and to the evolutionof the corporate structure itself.The effectiveness of a company’s Investor Relations can only be evaluatedover the long term. In the meantime, however, it is important to assure thatthe company does not experience a sudden loss of visibility or credibility,as this would deteriorate, and possibly endanger, its ability to tap the capitalmarkets in good conditions.The volume, frequency, and quality of Investor Relations should beconsistent over time, under all circumstances, including in the event of thefollowing:Budget cuts;Major changes in the size and/or shape of the free float, including a secondaryoffering, a sharp increase in the number of retail shareholders,an increasing internationalization of the institutional shareholder base,more employee shareholders;Coverage by an increasingly large number of analysts, includingabroad;Listing on a foreign market, and so on.Flexibility will also mean being able to adapt to changes in the following:Regulations on the dissemination of financial and other information;The expectations and demands of the markets;