Exactly 18 months ago, I was wrote about the pendulum swinging in the direction of favoring investor relations professionals having both traditional finance and investor relations experience to qualify for the senior-most IR position in a company. Today, I start 2010 by sharing with you that the pendulum’s movement has steadied and become a significant trend in the direction of the profession -- one that I believe could become the prevailing direction of the investor relations career of the future.
Since writing about this topic in July 2008, our clients have expressed higher levels of interest in practitioners whose backgrounds included substantial tenure in traditional finance roles, such as public accounting, controllership roles, treasury and CFO experience. Some clients also embrace experience as a financial analyst, either from Wall Street or internal corporate experience, to fit that bill.
Why is this happening? Some may think it is the mood of the moment and simply personal preferences of the hiring CFO. I certainly think that is some of the underlying reason. However, I think the more significant aspect of this is that a solid track record in finance provides several competitive advantages in the following areas:
* Intellectual Finance Agility: ability to intellectually contribute to a discussion about a company’s overall finance issues, versus just those related to the investor relations professional’s responsibilities.
*Job Versatility: with broader perceived intellectual strengths, and diversity of career experience, talent retention increases dramatically and career longevity with one company becomes a key part of the overall talent strategy.
In addition, with all that has happened in our global capital markets, the pressure on CFOs and their finance organizations to have professionals whose broad career experience allows them to be able to engage in conversations that incorporate knowledge and experience to help generate strategies and solutions, has become critical. IR owns the keys to the answers inside the capital markets about investors – corporate boards and management teams want that person to be the knowledge center and leader of those discussions to advance their organizations.
In addition, management teams are now focusing clearly on which other corporate functions an IRO can have under his/her responsibility as they earn their place at the leadership table. Corporate development, strategic planning, and corporate governance all come to mind and today are being actively discussed as potential career tracks for IROs – a decade ago, these were rare opportunities for IR talent and they are rapidly becoming a reality.
Trading with the Trend
The critical question for you is determining whether or not you should you “trade with the trend” or not? Near term, there will be plenty of hybrid investor relations positions at mid-cap companies that incorporate both investor relations and corporate communications, allowing talent without the finance experience to advance their careers. However, with an 18 month trend now in place (and, frankly with our client base it has been developing for more than two years) professionals need to seriously consider creating a career strategy that incorporates the finance experience into their career portfolios. Whether it is getting an MBA in finance, moving into a finance role for a defined period of time and then returning to IR, or considering a CFA designation – the finance factor is not going to be dismissed for too much longer.
Tip of the Month: With a recession occurring nearly every 7 – 10 years, start planning now to lessen the impact of the next one on your career.