In the wake of rising class action lawsuits from shareholders and the wave of corporate accounting and fraud scandals in the United States, new regulations have required companies to change their investor relations practices. The primary legal shifts are caused by the Sarbanes-Oxley Act, Regulation Full Disclosure and Regulation M-A. Although it is hard to imagine that there are any public companies that are not familiar with these changes by now, this book draws on lawyers, public relations counsel, investor relations consultants and communications specialists to describe what the minimum requirements are now for "good" investor relations practices. The advice will be most helpful to companies who are going public for the first time or have only been traded outside the United States.The book opens with "Fundamentals of Investor Relations" by Donald Allen of the Allen Group; "IR for Blue-Chip Companies: The New Look" by Heather Harper, Hollis Rafkin-Sax, and Bryce Goodwin of Edelman Financial Communications; "Litigation IR and the Duties of Corporate Disclosure and Governance" by Theodore J. Sawicki, Esq. and Scott P. Hilsen, Esq. of Alston & Bird LLP; and "The IR-PR Nexus" by David Silver of Silver Public Relations.
I found the next section more helpful because it outlined appropriate practices in the context of selected financing scenarios (stock buybacks, M&A, private placements, and IPOs). For those who haven't done these types of financings before, you can use these articles as helpful checklists.
Part 3 will be the least broadly applicable . . . but can be very helpful to the few who will need it: "IR Tactics in Proxy Wars and Other Crisis Scenarios". There aren't very many such proxy fights and crises, but most people haven't been through one . . . so you need help when you find yourself in this kind of situation. The last article on the lessons of the Hewlett-Packard merger with Compaq is probably of the most general interest for those who followed the fight.
The last section has articles about non-U.S. issuers accessing the U.S. capital markets, investor relations in microcap companies, working with ratings agencies and a description by one investment manager of what he wants to learn (Christopher N. Orndorff of Payden & Rygel Investment Co. did that article).
Everything that is contained in the book could have been learned by becoming a member of the National Investor Relations Institute and taking the fine classes it offers.
I graded the book down because it had no information provided by top investor relations executives and because it had almost no information on what institutional investors want. The top people who serve as investor relations officers know more about how to do this job well than "experts" who haven't held those positions. Also, you cannot really identify best practices unless you measure the results and connect the results back to some practices that some do that others do not. There was no attempt to do this kind of research behind the "conclusions" offered by the "experts" here.
Having done work on identifying investor relations best practices by benchmarking investor relations executives and interviewing tens of thousands of institutional investors over many years, I found the conclusions in the book to be embarrassingly below the standard of today's "best practices." The practices are certainly adequate ones . . . think of them as being the minimum for good IR practice.
Instead of reading this book, I suggest you locate an investor relations executive who has been highly successful over a number of years and take that person out to dinner to learn more about what she or he does. You would learn more that way.
