I was delighted to see an article in the FT espousing Investor Relations Directors as a source of Non-Executive Directors.

This is a subject close to my heart and, as co-founder of Fidelio partners, to my company’s heart.

Personal experience 

On a personal level I have headed the global IR function for two great European companies, UBS and Volkswagen.  I feel that the latter, in particular, was one of the most interesting, demanding and satisfying IR roles. It was a privilege to have been appointed and I was proud of what I was able to achieve over a seven year period. Currently, in addition to leading Fidelio, a Board Development and Executive Search consultancy, I am also establishing a Board portfolio which extends across Asia, Europe and the US.

Fidelio supports Boards in terms of composition i.e. Board Search for Independent Directors. We also advise Chairmen and CEOs on achieving greater Board effectiveness in particular with regard to satisfying the demands of shareholders and stakeholders. Topics are wide-ranging and include shareholder activism, executive remuneration and defining the role of the Chairman.

Fidelio is also a market-leading Search firm for senior IR roles, as part of our broader expertise in senior Finance and Communications appointments. We do this on an international basis.

Written and spoken word

Fidelio is almost certainly the greatest public advocate for the potential of IR and IR professionals. I personally have spoken on the subject at Conferences from Cairo to Sydney and London to New York.  Indeed, I’m looking forward shortly to picking up the theme again in Denmark and Germany. We’ve also written extensively on the subject in a range of publications and the following are of particular relevance:

–       2011 “Board Diversity and Corporate Reputation” where we first explored the potential of the IR Director moving onto ExCo and the Board

–       2014 “What relationship should the IRO have with the Board?” where we reviewed how IR Directors can engage the Board more effectively. [Please contact Shu Zhang for a copy]

–       2015 “Plea for Strategic IR” here we analysed the skill sets required for the IR Director to fulfil the role of strategic advisor to the Board.

Perception and reality

But, as the FT article cites, while one or two IR Directors do move into Non-Executive roles, the numbers remain small and most Chairmen do not look to IR as an obvious source of future Board Directors.

Fidelio held a series of seminars “IR & the Board” in conjunction with the IR Society and Citi Depositary Receipts in 2012. We argued that senior IR Professionals, alongside other very senior corporate functions, often bring skills and perspectives that are important in the Boardroom.  I have raised this point at various Executive Search forums including in 2014 the 30% Club update on the Davies report “The Evolution of Boards”. Among a panel of Chairmen, Allan Cook CBE, who sits on multiple Boards including Atkins plc, gave a very sensible answer. Yes, corporate functions can well provide a good training ground for future Non-Executive Directors, but, importantly, the executives must demonstrate that they have the breadth to contribute fully at Board level.

Those who have headed a global IR function may bridle at the inference that the role is too narrow. But I am also fully aware that not all IR roles are empowered in this way. Some Chairman and CEOs fully understand the strategic importance and hire into the role accordingly. They also work closely with the IR Director. But this is far from universal.

Many IR officers (IROs) are not in strategic roles and some behave like technicians rather than business leaders. Therefore IR Directors aiming for a seat on the Board have to contend with perception as well as reality.

A plan of action

And this is where Fidelio recognises that a more strategic response is required – simply flagging that IROs represent a good pool of future Board Directors is not enough. This is our analysis of what needs to be done:

1. We need to address the challenge that most Chairmen do not consider IR Directors to have the breadth of experience to be able to contribute at Board level.

2. Therefore the industry and IR professionals must act collectively and individually to demonstrate that an IR Director has much to add to the Board room discussion.

3. IR industry bodies such as NIRI and the IR Society must take up the torch and create a pathway for their members. This is complex and can also involve a painful honesty. But it is critical work in increasing the standing of the profession.

4. Individual IR Directors must take their own careers in hand. They must ensure that they both add value in what is a critical role for the company but also that the value is understood and appreciated. Importantly IR Directors must continue to grow and develop as business leaders and be recognised as such.

Targeted development programme

We recognise that this can be a major challenge and difficult for an IR Director to tackle in isolation. Fidelio’s strategic response to the IR glass ceiling is a targeted development programme “A Seat at the Table” the first of which is being held at the Royal Military Academy Sandhurst.

This is the inaugural Programme in a series and responds to the criticism expressed in the Davies Report that most companies do not have a sufficiently strong pipeline of female executives to become the next generation of Chairmen and CEOs. Technical skills are a given and we focus on the personal and professional development of Senior Female Executives as a preparation for the critical transition to the most senior Executive and Non-Executive roles within an organisation.

In a nutshell we provide each participant, including senior IR Directors, with a framework for understanding her own leadership style; a mirror for personal presence; and a road map taking account of internal and external stakeholders with practical steps to navigate the transition to Senior Executive and Non-Executive roles. Additionally we explore resilience and leadership “at the sharp end” or under extreme pressure.

To do this we enlist experts in their respective fields who are able to look at leadership from a number of angles. I will be joined by General Sir Richard Shirreff the former Deputy Supreme Allied Commander of NATO; Professor Bob Garratt, an expert on International Corporate Governance and visiting Professor at Cass Business School; Robert Rowland Smith, philosopher, author and consultant to global businesses; and Christopher Heimann, theatre director and head of improvisation at a leading drama school.

Bridging the gap

Thus I absolutely agree that IR can be a good source of Non-Executive Directors. I also think that this rich seam of talent is all the more interesting because there is a good gender balance with a number of women holding senior IR roles.

However, there remains a perception gap and indeed a development gap and IR Directors must help themselves if they to aspire to the Board. If as an IR Director you are being asked to justify executive pay to shareholders, do think critically about your own career. Is investment required? If so, the effective leader knows how to make “The Ask”.

I look forward to your feedback and welcome a debate.

Appendix:  Fidelio Events and Publications

Fidelio Partners is a Board Development and Executive Search consultancy with leading expertise in IR which is underpinned by regular speaking engagements and publications on the topic. A selected list is shown below.

Events

• Fidelio to speak at IR Club on “Plea for Strategic IR” in, Germany, January 2016, details TBC
• Roundtable Breakfast “IR Director as a Strategic Advisor – True or False”, London, September/October, details TBC
• Fidelio speaking at the DIRF (Danish Investor Relations Society) on “A Strategic Approach to Career Development for IROs”, Copenhagen, September 21, 2015
• A Seat at the Table – a Fidelio Development Programme for Senior Female Executives, Sandhurst, September 8, 2015
• “IR and the Board” Seminar, London, December 4, 2014
•  “The role of the Chairman in promoting greater Board diversity and effectiveness”. Board breakfast with Dame Alison Carnwath, London, June 24, 2014
•  “Your career in IR”, 2014 UK IR Society Annual Conference. Gillian Karran-Cumberlege moderates the closing session, London, June 17 2014,
• “Accessing Capital – The Competitive Edge” Panel Discussion, November 7, 2014
• Gillian Karran-Cumberlege of Fidelio Partners chaired The UK Investor Relations Society 25th Annual Conference. ”The Investor Relations at the Heart of the Stakeholder Universe”, London, May 24, 2011
• Fidelio spoke at Middle East IR Society Conference, Beirut, October 21, 2010
• Fidelio spoke at BNY Mellon 3rd Annual IR Training Seminar – The New IR Imperative, London, July 2, 2010
• Investor Relations Best Practice Seminar at the Egyptian Stock Exchange, Cairo, Apr 11, 2010

Publications

• Plea for Strategic IR, May 2015. View here
• Building a debt IR function, Dec 2013. View here
• Articulating the value of Investor Relations and why the CFO cares – March 2013. View here
• Shareholders, IPOs and the Rise of Interim IR – September 2011. View here
• Board Diversity and Corporate Reputation – October 2011. View here
• IROs at the Crossroads: An Interview, 10 December 2012. View here
• Accessing Capital. What the CFO needs: Profile, Skill Sets and Resource, 30 April 2013. View here
• Bondholders – still the poor relations? View here
• Shareholder Retention, or why Boards Prioritise Acquiring New Shareholders. View here
• Thoughts on Automotive IR, 07 September 2009. View here

For articles featured in the UK IR Society’s Informed Magazine, please contact Shu Zhang.

• Key developments for the IR profession in 2015. December 2014
• What relationship should the IRO have with the board? October 2014
• Take it from the top… the chairman and the IRO. November 2013
• IR at the Heart of the Stakeholder Universe. September 2011
• From Good to Great IR. September 2010