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The New Investor Relations

Written by: Andy Marken

Article Overview: Book Review -- Expert Perspectives on the State of the Art – by Benjamin Mark Cole; Bloomberg Press, 100 Business Park Drive, Box 888, Princeton, NJ 08542, www.bloomberg.com/books, 609-750-5070, October 2003, hardcover -- $55, 320pps

The New Investor Relations

What a difference a couple of years make.

Two years ago Cole wrote The Pied Pipers of Wall Street: How Analysts Sell You Down the River. We’re certain the book caused more than a few people in this country to close out their brokerage accounts and stuff their savings under their mattresses.

But few analysts and brokers worried much about the financial journalist’s work because history had shown them they could continue business as usual. Most probably had very little concern over the impact his painstaking research and excellent writing would have on the way they carried on their activities to “take care of their own.”

They couldn’t foresee that Cole and other excellent journalists were going to shake the very foundation of the research and reporting of corporate financial activities. The editorial reporting of the accounting and financial scandals along with the resulting indictments and shareholder lawsuits shook investor confidence. It forced public and investor relations professionals as well as their management to take a hard look at their communications activities.

While Cole may be a financial journalist, he has done an outstanding job of detailing what we, as professionals, must do to rebuild the credibility and reestablish our company/client relationships with the investing public.

We’ve read a number of articles and books in recent months on the new power and position public relations should have in the years ahead as firms struggle to rebuild the relationships with all of their publics. All of them seemed superficial in nature because they professed “the new honesty” that was going to be put forth and how this would aid in elevating the role and influence of our profession.

Our concern was how could this be done if we didn’t fully understand the impact of 24/7 financial analysis and reporting or what can happen to stock value based not on corporate performance but on the organization’s ability to manage investment community expectations.

The New Investor Relations is one of the first of a new breed of combination strategic and tactical how-to books we believe will reshape the way we communicate with our many publics. Cole sees a reshaping of the separation and exclusivity of IR (investor relations) and moving it back into the broader and more influential public relations arena.

Cole doesn’t dwell much on the lofty and “exclusive” role of investor relations but brings the practice by corporate executives and practitioners back into the real day-to-day world of business management and communications. In addition, the author has drawn inputs and information from some of the best and most respected people in the investor relations field. These seasoned – and highly reputable – professionals don’t present lofty advice that few can relate to or use but instead they bring us back down to earth with practical common sense.

If you work in or are involved with a publicly held company, The New Investor Relations is a book that must be read and reread. If your firm is privately held or you only work in employee or marketing relations we still believe this is a must read book. The higher standards businesses are being held to apply to every organization – for profit, non-profit and governmental.

The reporting and care publicly held companies must follow in managing the expectations of the investment community are no different than your dealings with all of your organization’s publics. Cole and his guest authors spell out a myriad of valuable special tactics you should study in depth so they become second nature or as natural as turning on your computer. When a crisis occurs you won’t have the luxury of time to rush to your library, pull out your copy of the author’s book and absorb the expert assistance.

That’s when effective counsel and flawless execution will be mandatory. Cole and his guest authors have spelled it out for you from the 30,000 to street view. Now it will be up to you to professionally handle the situations on a day-to-day basis.

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