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Best practice case study: Six words

AstraZeneca won the ‘Best overall company IR’ award at the 2015 Best Practice Awards. Craig Marks looks behind the success.

“You’re kidding!”, “Is this a gag?”, “Craig, who did you bribe?”. These are just some of the reactions from members of the AstraZeneca IR team when our name was read out at the IR Society Best Practice Awards in November last year.

The IR team at AstraZeneca felt very proud, humble and, to put it mildly, surprised to win the award for Best Overall IR. It was particularly encouraging that the award was a voted category, meaning our efforts have made a real difference already, to a wide audience. Last year was a period of real change within the team, with plenty of departures, rotations and new colleagues coming into the team with varying degrees of IR and science experience. AstraZeneca has a great story to tell, but with a virtually new IR team in both the UK and US, it’s been a challenge in what could have been described as ‘Year Zero’.

The initial focus in 2015 was on the basics. There were good practices in place, but the foundations of the IR house had been a little neglected. Some of the windows and walls were great, but we couldn’t hope to provide our IR customers with a good enough service if we didn’t have the foundations in place.

Some of the basics included logging meetings. CRM compliance in an IR team is essential but was missing. We now log every meeting in consistent ways using consistent procedures. We log all interactions in advance, so that we can show management the details, the participants, ownership and the investor profile in the car before the meeting. We moved to a single provider of both the database and the shareholder analysis, leveraging a stronger relationship with the provider, while reducing costs.

Other basics included planning. By the autumn of 2015, the team was exhausted, accepting almost every meeting, roadshow and conference request. Joining a pharmaceutical business, I was amazed at just how many events we could attend and I think we attended them all. This has all changed. We now have a sub-group of the team that reviews and prioritises requests on a weekly basis with all of 2016 already mapped out and we’ve taken real learnings on the events that work and the ones that don’t. Diaries are managed very far out. Management has much greater visibility.

Proper and systematic investor targeting is now fundamental to our programme, as is investor feedback through the initiation in 2015 of an investor perception study. Proactively calling analysts and top shareholders on the morning of results is now standard practice and the team divided the wide sell-side coverage between team members as we develop a ‘relationship manager’ role for each team member. This means that we now actively engage with sell-side analysts much more often, in person when we can, immediately challenging their forecasts and research. The sell-side knows who their first point of contact is.

Explain this to me like I’m a six-year-old
One of the observations for an outsider coming into the sector from consumer and retail, was how impenetrable some of the communications in the sector can be. Many of IR’s materials were tailored exclusively for the specialist, a very important audience, but this excluded generalists. This is why simplified results announcements, presentations and scripts, assuming little prior knowledge of the science and many medicines was vital; the feedback was instant and great. The mantra of Denzel Washington in the film Philadelphia was ‘explain this to me like I’m a six-year-old’. I can empathise with that.

But fixing the basics is not just limited to procedures, processes and routines. Being proactive is a cornerstone of best practice in IR. Investor relations success is a function of how much you want to put in. One could do the bare minimum number of roadshows and just focus on results. Or one can pick up the phone before the call comes in, get on the road to target the incremental investor and do much, much more to help the market’s understanding of the business.

The pursuit of flawless execution
At AstraZeneca, we want to be described in six words: prepared, reliable, knowledgeable, clear, honest and proactive. We’ve finally learned to say ‘no’, including to events and to many internal requests. We’re very clear that the IR team exists to convey a fair picture of AstraZeneca in order to develop and maintain a group of supporters and believers who will appropriately value the company.

But the foundation and absolute bedrock of all of our activities is ‘Will they improve the quality of the share register?’ If they don’t, we don’t do them.

We know we can do much more. With a settled team that will allocate much more time to personal development, a new fixed home for the UK IR team this year in Cambridge, a great mix of skills and experience and a glass is half-full, can-do, why-not attitude, we know we can get better and provide a fantastic service to the market.

We’re exploring more technologies and interfaces around workflow and the CRM, more techniques to target investors, further ways to provide access to management and even simpler ways to communicate. Only with a relentless pursuit of flawless execution can we get better; there’s always more to be done in IR.

Published: 8 April, 2016