A key investor relations problem is deriving a consistent story to communicate to the investment community. This can be a real problem when investors and analysts are allowed unfettered access to many people within the company, since the information they receive may vary by person, which results in an inconsistent story being disseminated in the investment community. This is a particular problem when new rumors about the company surface in the marketplace, or when the news media issues a potentially damaging story about the company - in these instances, inconsistent responses can be especially confusing to the outsider.
A multi-layered set of policies and procedures, coupled with strong information centralization, is needed to deal with this problem. First, a company-wide policy should specify that all outside requests for information to the company be channeled to a highly restricted group of employees. Further, an accompanying procedure should specify the manner in which these contacts are routed to an authorized person. For example, if an emergency call comes in over the weekend in regard to damaging information about fraud at the company, this contact should be routed solely to the investor relations manager, since this is a highly sensitive issue that should only be dealt with by (presumably) the person most highly prepared to handle the issue. Conversely, if an inquiry comes in regarding a new product launch, the procedure can specify that the marketing director is the most appropriate contact.
Once these policies and procedures are in place, the next step is to ensure that the people designated to deal with the public are schooled in the most likely questions to be asked, and the most appropriate responses. The usual approach is to conduct an annual one-on-one training session with each person designated to deal with outsiders. This technique tends to focus on the style and legal ramifications of responses, as well as standard responses to a common checklist of questions. Where the method breaks down is when new scenarios arise for which the standard responses are not adequate. For example, what if an influential blogger creates a rumor about the company, or if there is an accident at a facility that is covered by the local media?
In these cases, the person responsible for collecting information for which responses must be constructed is the investor relations manager. This person must monitor bloggers, stay in touch with influential shareholders who may also hear rumors, and constantly monitor the news. Further, this person should review events that have arisen with other companies, and decide if the same event could occur with their firm. Once an issue arises that could require an official response from the company, the investor relations manager must notify all people authorized to speak on behalf of the company about possible incoming questions, and discuss the most appropriate response. Once decided upon, the standard response to the new scenario must be added to the standard checklist of questions, and disseminated to the authorized contact list.
In addition, anyone speaking to outside parties must report the results of their communications back to the investor relations manager, who logs the event and also decides whether the standard checklist must be modified, based on the information imparted to the outsiders.
In short, investor relations needs to be a highly coordinated function that requires the channeling of information requests to a select group of specially trained employees. Further, the investor relations manager must identify new scenarios to which the company may be subjected, coordinates the formulation of the most appropriate response, and ensures that all employees authorized to talk to the investment community are aware of the new company position.