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IR Best Practices Audit

The term ‘best practice’ refers to methods and services accepted as the best option within the industry that is being served. Adhering to best practices enables companies to compete successfully in a market sector and eventually establish themselves as leaders in the field.

On occasion, the standard that’s defining best practices is established by regulatory bodies and agencies. In the absence of such regulations, the standards could vary significantly.

Regardless of the specifics, best practices should be applied to investor relations in every single organization. A few of these best practices include:

Honest Communication
Being forthright is one of the best practices as far as investor relations are concerned. Your communication should be based on the current state of the company, whether good or bad. If investors have a feeling that you’re hiding something, the relationships that you’ve worked so hard on could be ruined. It is still possible to generate a positive response to bad news announced in the right way. If another entity makes the announcement first, the consequences could be disastrous for your organization.

Visibility and Transparency
Bad news often lead to problems in communication. Many entities are concerned about the potential negative feedback on behalf of investors. Transparency will be crucial in such situations. You will need to communicate openly to reassure investors and to show them how the situation is being handled. A proactive approach on your behalf could negate any potential damage.

Thorough Preparation
Any message intended for investors will have to be prepared and reviewed thoroughly before being broadcast. This rule applies to all kinds of communication – from press releases to crafting social media updates. When preparing, you should try to anticipate questions that may arise from the specific information. You should also try to come up with honest and comprehensive responses to such follow-up questions.

These are the three best practices that establish the framework of effective investor communication. Obviously, you will have to focus on various other essentials to provide relevant information and address risks (especially those stemming from the communication of bad news). SeriousTraders can help you craft the right communication strategy. We will conduct an audit of your current approach and your ability to mitigate disaster in the case of negative developments. The team will work with your senior management to enhance the strategy and see how the best practices apply to the communicational approach that you’ve chosen to keep investors updated.