5 Mistakes You Should Avoid in IR

Investor relations are crucial for maintaining trust on the capital markets and fostering long-term relationships with shareholders. However, there are common mistakes that companies must avoid to ensure successful communication with investors. 

Here are five key pitfalls to steer clear of:

  1. Stay engaged after the IPO: After going public, it is essential not to disappear from your investors’ radar. Maintaining regular communication with both current and potential investors is key. A good balance of conference calls, roadshows, and participation in capital markets conferences will keep your investors informed and engaged.
  2. Set realistic expectations: Overpromising and underdelivering can severely damage a company’s credibility. It is therefore better to manage market expectations well, true to the motto “underpromise, overdeliver”. By setting achievable goals and occasionally exceeding them, you can build a reputation for reliability and strength trust in your company on the capital markets.
  3. Maintain transparency in times of crisis: When business performance does not meet expectations, some companies might be tempted to go silent. However, this is the time when transparent, proactive communication is most needed. Regular updates and clear explanations can help maintain investor trust even during challenging times. Language rules can be prepared for critical questions to provide valuable assistance.
  4. Maximize the Annual General Meeting (AGM): The AGM should be more than just a purely statutory obligation. It is an opportunity to positively influence your shareholders and reinforce their confidence in the company. Consider the AGM as a platform to explain the business development and your corporate strategy. This can be particularly important in the event of any controversial decisions made by the management and negative issues surrounding the company. With a special coaching, the Management Board can prepare well for the speech and communication with shareholders.
  5. Respect all market participants: Building and maintaining a good rapport with capital market players is crucial for the company’s success. Arrogance or attempts to dictate reporting to financial journalists, for example, can quickly backfire. Respectful and open communication will lead to more favorable outcomes and a stronger reputation. Good preparation is required before meetings with investors and the media in order to be optimally prepared for the interviewer.

Avoiding these mistakes can lead to more successfull investor relations, helping to build trust and support from your shareholders over the long term.