Wearing two hats: Small-caps and balancing IR with another role


Two small-cap IR professionals talk about the challenges of balancing IR with another role


There can be no doubt that IR is a full-time job. Despite that, a significant number of IROs, particularly those at smaller firms, serve in roles which combine investor relations with another corporate function, such as corporate development, treasury operations or corporate communications.

One such individual is JT Farley, managing director of investor relations and corporate communications at ITG, a broker and financial technology firm based in New York. He says: ‘Wearing two hats can be challenging, particularly in instances which require you to be in two places at once, such as a top-tier media interview conflicting with a management-investor meeting.’ 

Adam Borgatti, vice president of corporate development and investor relations at the Aecon Group, agrees. ‘Balancing investor relations with a corporate development role that involves M&A and strategic support can be a challenge. While timelines for financial releases, investor events and shareholder marketing are generally predictable, the other side of the dual role certainly is not.’ 

Therefore, it is a case of prioritizing. Borgatti says: ‘I’ve found the key is to schedule all the non-IR activities as much as possible away fr om quarterly earnings and marketing windows. This helps to smooth the work as best you can throughout the year.’ Inevitably though, there will be times where this won’t be possible, he adds, such as in an active M&A deal, ‘and you are faced with difficult and time sensitive deliverables on both sides’.

Farley concurs: ‘The seasonality of investor relations activity – earnings reports, scheduled financial disclosures, conferences and roadshows – dictates that for a number of weeks each year you are effectively able to wear only the IR hat.’ 

Given this, Farley says that managing both roles effectively is much easier if you have backup for your non-IR role during peak times, either through some help from in-house staff or from an outside agency. ‘While handling these competing responsibilities can be challenging, the advantages to this juggling are significant. As the main contact for investors and analysts, you are expected to have a thorough understanding of your firm’s business, and having a second role will boost that knowledge. Managing corporate communications includes participating in new product launches, marketing initiatives, business strategy discussions and crafting your company’s messaging to a broader audience through the general and trade media.’ 

In addition, cultivating relationships with the media covering your company is helpful in gathering competitive intelligence about the industry, says Farley. ‘After wearing both hats for some time you will automatically look at every piece of external communication through multiple lenses: How will investors view this new product launch? What will employees think about the change in earnings guidance? Are we telling our company story in a way which is likely to resonate with the media as well as analysts?’ 

Borgatti says keeping on top of things is vital: ‘Try not to lose your head and keep it all in perspective. It’s at these critical times wh ere you need to maintain focus and not be overwhelmed – and that’s what makes working in both roles fun.’ He adds that he and his team are also able to leverage other areas of the company when necessary.

Farley observes that we are likely to see a growing number of dual IR roles in the future, given the marked decline in the number of analysts covering many small or mid-cap companies as well as the rise of passive investors who require less frequent contact with investor relations teams. ‘These shifts do not diminish the value of investor relations, but they point to potential changes to the profession in the years to come. Investor relations professionals who want to stay ahead of these changes should consider how they can add value well beyond their primary role – even if that means trying on a second hat for size.’


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