Customer Reviews

Investor Relations: The Comprehensive Guide

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I had a problem with this book from the very first sentence where the author asserts the goal of IR is to have the highest possible stock price. That is not the goal at all - in fact NIRI (the National Investor Relations Institute) was founded years ago to make sure that exactly that did not become the goal of IR. While it is tired to use the rash of large frauds in the early part of this decade as a warning, this really is the thought process that led to Enron (where the IR chief got to spend lots of time on the stand and get 18 months in jail for his part in keeping the stock price high). Even if those extremes are avoided, trying to keep the price "as high as possible" increases the chances of a crash and an eventual lawsuit - not a desired outcome.
So what is the goal of IR? It is to create the broadest and most correct understanding of the company. Then the market, and others, can understand what matters and what does not for the company - reactions are based on facts at that point, not on misperceptions. Some of the information in this book may help a less than savvy management team meet this goal. For example, it would be useful for them to understand the different types of investors. However, the book has tried so hard to be broad that it does not really give the breadth needed to support an all out IR effort. In the end, I think most people would be better off looking elsewhere for their advice.

I thought this was a wonderful book. There are a fair number of good public relations books on the market. And there are a few tomes about investor relations. But I am not aware of any that layout all that is included in this book about an investor relations executive (IRE) at a public company: his job description, goals, responsibilities, and minefields that he or she has to face. I found it interesting that the author chose to default to "she" when he referred to IREs. Women are traditionally thought of as filling public relations roles. But it is my understanding that investor relations (a highly specialized and technical subset of public relations) is usually worked by men.

I also found it kind of odd that the author called IREs investment relations OFFICERS. By calling them "officers" that seemed to me that the author was trying to catapult them up into the highest echelon of a public company's corporate team. I'm not sure that is the case in reality. While it is true that an IRE does hobnob with the CEO, the CFO, the public relations guru, and the company's Board of Directors (BOD), I'm not aware that the IREs enjoy similar status as these other executives and directors generally do.

As a discovery expert who has worked on a number of high profile securities fraud class action lawsuits I have seen firsthand how the organization charts for some very large public companies fit an IRE into the executive and director mix. And I have had to review the correspondence, SEC filings, SEC filing drafts, and other investor relations papers that a number of IREs have been responsible for creating, producing, and filing. I think typically the IRE is a subordinate of the CFO, but has dotted line responsibility to the CEO, BOD, and the public relations executive if one exists. And a PR executive more than likely will exist.

Overall regarding this book I must say it is a gem. It is very well written and outlined. And it logically flows from chapter 1 all the way to chapter 23. And it is packed with content. However, there were a few instances that if changed I would have liked the book better. Chapters 8 and 9 seemed to be related. I would have liked the book better if those chapters were merged and then the topic of SEC filings that they cover were expanded into three separate chapters. And Chapter 17 just did not fit for me. I'm not sure it should have been included. And if included, I think it should have been written from a different perspective - that of the IRE. There was a typo at page 89 regarding the Yahoo! Finance URL.

Chapter 11 on "Guidance" was great. And I liked Chapter 22 a lot, too. If I were writing the book I would have made chapters 18 to 23 part of an Appendix. They seemed to be add-on material for me when reading this book. 5 stars!