Investor Relations

SEVEN KEYS TO SUCCESSFUL INVESTOR RELATIONS 57Does the content of the available information, financial as well as nonfinancial,correspond to market expectations? In other words, does thesystem track the right performance metrics?Does it compare favorably with the kind of information provided bylisted competitors?Can the information systems deliver data at constant scope and/or constantexchange rates (important in the event of mergers, acquisitions,and disposals)?Can the systems handle different accounting standards, such as theinternational (IFRS) and American (US GAAP) standards? Can it managethe transition from one to the other?Does the company have the internal resources and skills to upgrade theinformation systems? What kind of cost and time would the upgraderequire? By how long could it delay the planned IPO?The IRO should ensure that key consolidated figures are available withinthe legal deadlines that will apply once the company is listed. Indicators,which will be used to set targets for financial and operating performanceover the short and medium term, should also be factored in budget reportingand in the business plan so that any discrepancies with market expectationscan be anticipated and communications adjusted accordingly. It is alsoworth remembering that a company’s budget is not known to the investmentcommunity, while historic data, past performance, and future objectives areat the heart of Investor Relations.Just as it is essential that IROs and their staff have solid financial skills,financial information systems must also be organized to serve the purposeof the Investor Relations strategy.Markets are frequently developing new ratios and concepts that requireadditional data. These new ideas must be expertly analyzed in-house beforethey can be used in the company’s Investor Relations. It should be possible,for instance, to verify with the accounting department that the desireddata exists, either in raw form or already included in a ratio. The IRO considerswhether it is appropriate to use the ratio, and the impact it couldhave on market perception. It will then be decided, in conjunction with topmanagement, whether the company should give in and deliver the information,explain why it is not providing it, or propose another indicator that ismore meaningful from an operating standpoint and more flattering to thecompany over the long term.