Investor Relations

SEVEN KEYS TO SUCCESSFUL INVESTOR RELATIONS 47When major events such as annual general meetings are scheduled, this logisticsspecialist may also rely on resources from others areas of the company,such as corporate communications division, or on resources in other countrieswhen the event is being held outside the company’s domestic market.2.3.5 External Investor Relations ServiceProviders and AdvisorsProviding they are properly selected and integrated in the company’sprocesses, external advisors can bring genuine results to companies: moreinformation disclosure, press coverage, share-trading volume, institutionalinvestor ownership, analyst following, and market valuation. Of course, itis more so with small companies that face particular problems in improvingvisibility and attracting investors. Because they have access to a much widerscope of cases, and have been associated with a variety of situations, the firsttask the Investor Relations firm usually undertakes is to improve the company’sstory and to train management. This may imply persuading managementto be more transparent and, in particular, to release more informationabout the company’s business prospects. Then the firm can arrange meetingsbetween management, institutional investors, and financial analysts.Media contacts are also seen to be important, for two reasons: It mayprove easier for a smaller company to get media coverage than analyst followingand also because media is an efficient means of communicating toretail investors. All of these may positively impact trading volumes. Ideally,these achievements may then be turned into greater institutional ownershipand analyst coverage, and ultimately, into higher valuation. Let’s be objectiveand admit that this is probably more the case for small caps that sufferfrom lack of liquidity and, therefore, lack of interest shown by institutionalinvestors. If no one knows about your company, the price will not be set at anefficient level. By improving liquidity and increasing institutional interest,Investor Relations professionals can help establish a company’s fair value.What about large companies hiring external consultants, then? Althoughmany of them have in-house Investor Relations teams, they do nonethelessuse Investor Relations firms like other top-level company advisors. Thescope of assignments may be identical to that required for smaller companies,but they are more likely to be more used to investing in such servicesas perception studies.2.3.5.1 Scope of assignmentsCompanies may rely upon external service providers to do the following: Handle all or part of their financial communications and InvestorRelations program. This may include helping with incoming calls and