What IROs Need to Know About Stakeholder Engagement

by Pete Kidd on Apr 12, 2023 3:29:00 PM

When it comes to investor relations, companies are expected to create value for a wide range of stakeholders - not just their shareholders. To do so, they need to engage effectively with their different groups and ensure communications to these parties are aligned.

To help prepare for this environment, leaders from General Motors, Nasdaq, Essential Utitlies, Inc. and Notified came together for a special webinar in partnership with IR Magazine to discuss new approaches to stakeholder communications and how you can be successful.

Our conversation covered:

How the audience for investor communications is evolving and what that means for telling your story.
The impact of the market downturn on prioritizing ESG reporting and sustainability.
The way IR teams are working more closely with other departments, such as sustainability and corporate communications, to align messaging.
What digital channels and tools companies are using to ensure their story is received and understood by all stakeholders.

Keep reading to learn some of the main takeaways from this important discussion!

Tailor Investor Relations Communications to Specific Audiences

Ashish Kohli, VP of Global Investor Relations at General Motors, noted one effective way to engage stakeholders is to tailor communications to different types of investors.

“Institutional investors, admittedly, are numbers-driven while the retail group tends to be a little less sophisticated,” he said. “With the latter type of investors, I don’t think over-indexing on numbers is necessarily the most value-added way to attract them or keep them engaged.”

Kohli added that keeping investors up to date with a company and its progress through regular emails, as well as disclosing information on initiatives such as ESG (e.g. through an IR website), is an effective way to retain a good level of engagement.

ESG Communications, Reporting and Transparency

Although many companies have publicly embraced ESG as the cornerstone of their stakeholder policies, over the past year the movement has suffered a backlash.

As it relates to stakeholder engagement, IR professionals believe that while ESG communications are important, it is not only a marketing-led effort.

What matters is transparent communication around ESG performance and the delivery of a comprehensive communications strategy.

Transparent communication is more important than it ever has been before, in large part because both professional and retail investors believe a company’s ESG performance impacts investment decisions. Staying ahead of the conversation and interacting across all channels, including social, traditional media and even online forums, is a must.

Randall Hopkins, VP and Head of ES SaaS Solutions and Regional Head of Capital Markets at Nasdaq, also discussed the evolution of ESG communications, ESG reporting and how this work gets done in an enterprise setting.

“There are more ‘cooks in the kitchen’ than ever before, which creates both risk and opportunity,” he said. “But responsibility and ownership is a question companies are struggling with…the stakeholder matrix has grown right to left and top to bottom. It’s larger and more diverse. We need to be mindful of the fact that precision needs to be greater and be more thoughtful about how we do that work.”

New Forms of Digital Storytelling

Renee Marquis, Investor Relations Director at Essential Utilities, also noted the importance of optimizing communications and quickly adjusting to new ways of stakeholder engagement, such as using social media.

This can be achieved by thinking outside the box about what’s going to grab the attention of investors, shareholders and stakeholders.

“Do a long-term plan where you can kind of deliver little pieces at a time,” she said. ‘It’s easier to digest and keeps messages top of mind. Keep hitting the same message but maybe delivering a different piece, or a new piece that could be of interest, because repetition is important.”