Good Investor Communication Practices


Okay, imagine the average Objecting Beneficial Owner (OBOs opt to withhold their identity) or Non-Objecting Beneficial Owner (NOBOs opt to give their identity) of stock in your company sitting at their desk (in their clothing…let’s keep it clean here). They’re seeing the DOW and NASDAQ sink like a paper boat, wondering what in their portfolio to sell and not sell. If they have nothing else to go on but numbers, it could be your stock they sell.

Here’s the problem, they sell every minute and they do it through their brokers. How the heck are you supposed to communicate with them?

Annually, the NOBOs get some snazzy report by email (or snail mail if your desk is made out stacks of cash). It contains mostly canned stuff, a message from the CEO (talking about culture or innovation or something), company structure, or perhaps some philanthropy. The shareholder skips most of it and closely eyes the charts. They may go in for the numbers, they stay for the story.


…If you had an effective communication that focused on stock holder loyalty?

…If it spoke to them the same way your brand communicates to the public?

…If it transformed them from talking about the stock price into product or service evangelists.

Here’s how you do it:

  • Know the SEC guidelines – Not all investor communication is created equal in the eyes of the almighty SEC. If you have recently IPO’d, you may not have enough to say beyond your annual report and quarterly projections. Investor relations is not something you should take lightly. It should only be done by a person who has experience, has taken a investor relations course that has focused on SEC guidelines, or at the very least, sought a mentor in your local group/guild of investor relations professionals.
  • Give investors a landing page – Yup, an investor tab. A place where they can openly check on the company, download reports, and where you communicate with investors in their language. This isn’t a new thing, other companies have successfully done this. Here’s Starbucks page. As you can see, it doesn’t have to be complicated.
  • Offer a Monthly investor-specific email – Email can seem obtrusive, but when you’re talking about someone’s money, they are ALWAYS interested. This is where you connect the value of the company to the values of the company. You don’t talk about your stock, but answer complicated questions about your industry and the world around you. Connect these topics to how it affects the individual stock holder in general. It shows you are present, alert, and an industry leader.
  • Stockholders CAN be loyal – This idea may sound a little wacky in the age of cheap online trading. BUT, in an unforeseeable and uncontrollable stock market downturn they are going to keep SOME stock and good communication triggers the “go with what you know” response.
  • Invite brokers to the party – Keep communications open and be an excellent source of information for your company when its appropriate. Brokers love looking like crystal ball wielding geniuses. Make the stock easy to sell by helping them with good communication. However, communication with analysts can be a double edged sword, so if you are at all sick, irritated, rushed, or otherwise not prepared, gracefully tell them that you would be happy to return their call.
  • Internal communication – Internal shareholder communication is important as well. In most companies, not all employees are shareholders or eligible for options, but that doesn’t mean they need to be left out of the loop. Pick a quarterly investor communication piece that is SEC compliant touting the strength of your stock.

Open communication is important. Remember, the “bleeding and leading” news cycle applies to financial news as well. You can separate yourself from being stock market fodder by being consistently on message and present. Communications is like most things; showing up is half the battle. Make it easy to be a shareholder and loyalty will follow.


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