Investor-RelationsMedium

3 min read · 502 words

What the seat actually does

A listed company has owners who are not in the building. This seat explains the business to them, handles what analysts publish about it, and manages the calendar of results, guidance and meetings that goes with being public.

The constraint is disclosure law, not messaging. Anything that would move the share price must reach everybody at once; a fact given to one investor in a meeting and not to the market is a legal problem rather than a communications one. That single rule shapes what this seat can say, when, and in what forum.

• Results — the reporting cycle and the disclosure around it. See reading an annual report.
• Guidance, where a company gives one — a commitment that becomes the number it is judged against.
• The register — who owns the shares and how that is changing.
• Analysts and the consensus, which is what "a miss" is measured against.

A day, and where it goes

• The share register — who bought, who sold, and whether anything is building a position.
• Questions from investors and analysts, answered inside what has already been disclosed.
• The consensus, and whether it has drifted away from what the business is actually doing.
• Preparation — results, capital markets days, and the quarterly ritual around both.

What it is measured on

• Whether the company is understood, which shows up as a consensus close to what the business delivers.
• Register quality — long-term holders rather than turnover.
• Disclosure discipline. No selective disclosure, no correction, no investigation.
• Access, which is a fairness measure as much as a commercial one.

What it touches on this site

• The other side — research, which publishes the consensus this seat is measured against, and long/short equity, which reads both.
• The transactions — the ECM desk, an IPO and an activist defence.
• The documents — an annual report and the statements inside it.
• When it goes wrong — 2019, where the story and the filings described different companies.

How it goes wrong

• Selective disclosure. A helpful remark in a one-to-one meeting is the classic failure, and it is not usually deliberate.
• Guidance that becomes a target. Once a number is promised, managing to it can outrank running the business.
• Managing the consensus rather than informing it, which works until the gap closes on its own.
• Two stories. What the presentation says and what the statements say, diverging slowly.

Concepts to master

• Price-sensitive information has a legal definition, and the test is what a reasonable investor would use, not what feels important.
• The market prices expectations, so a good result below consensus falls — see why a share price falls.
• The register is a map of who is forced and who is patient — see the other side of the trade.
• Statements and narratives can be reconciled, and doing it is the first thing a sceptical reader does. See reading the statements.