Beyond the Numbers: Investor Day Imperatives

By Lauren Hilliker and Deven Anand

A well-planned and well-executed investor day can be one of the most impactful ways for a company to articulate its growth strategy and financial targets to the investment community. While not a requirement, most investors now consider it “best practice” to host one investor event at least every other year.

Given the significant amount of time, effort and resources required to successfully execute an investor day, every company should think critically about the event’s purpose, desired outcome, and logistics. Below we have outlined six guiding principles that every listed company should evaluate when considering hosting an investor day.

 

1. Identify the purpose: the cornerstone of investor day excellence

As you begin planning, set clear objectives and think critically about “the why.” While some companies choose to host an investor day annually (and consistency can be important), the most successful events are typically those with a specific objective to impart new information to the Street. It’s easy for any company to fall into the trap of hosting an annual investor day to “check a box;” however, that approach may not be worth the cost if new or more detailed information is not shared. Instead, every leadership team should ask itself: What is the business problem we are seeking to solve? What outcome are we aiming to achieve? What are the key takeaways we want investors to walk away with? Which members of the leadership team are in the best position to relay this information to investors?

The answers to these questions will not only help guide the company to its “why,” but they will also help inform scheduling and logistics later down the line. Investor days are not one size fits all events, so think critically about which format will best support your goals and meet the needs of your audience. Oftentimes, this is accomplished by showcasing a company’s deep bench of talent, highlighting customer testimonials and hosting demos to enhance the audience’s understanding of the company’s offerings.

 

2. Logistics: a peek behind the scenes

Once you decide to host an investor day, logistics should quickly become the company’s next top priority. First, determine when the event should take place – choose a date that doesn’t conflict with earnings, quiet periods, proxy season, options expiration dates or other notable industry events. While no date will ever be perfect for all invitees, avoiding “busy seasons” makes planning easier for the company and potential attendees.

Next, decide whether to host an in-person, virtual or hybrid event. Today, most companies gravitate towards the hybrid model as it offers a “best of both worlds” solution to investors and enables increased attendance and engagement for the company. While the hope is always to have more in-person attendees, every company should assume that many will join the live stream/webcast instead due to the time commitment and cost involved in attending in-person. This has made location less critical than it has been previously; however, we still recommend hosting an investor day in an investor-prevalent environment like New York, Boston or Chicago, all of which are home to several highly regarded venues like the stock exchanges, where most event logistics are handled by the venue’s events team (e.g., room rental, AV, catering).

 

3. Regulation FD: navigating investor day with confidence and in compliance

In the weeks leading up to an investor day, every speaker and company attendee should receive Regulation Fair Disclosure (Reg FD) training to ensure complete understanding of how Reg FD prohibits selective disclosure of material nonpublic information. It is typically the job of the Legal, Investor Relations and HR departments to oversee and manage this training. While everything disclosed during the formal presentation should comply with Reg FD, executives must be cognizant of how they handle sideline conversations around the event.

It is best practice for every company to: 1) limit the number of spokespeople given the opportunity to interact with investors, 2) designate executive(s) to monitor for unintentional disclosures, 3) establish a procedure for 24-hour corrective release in the event of an unintentional disclosure and 4) use “safe harbor” language any time the company is making forward-looking statements. Keep in mind that any company attendee could commit an accidental disclosure even if he/she is not presenting (e.g., during a break, lunch, bathroom trip, etc.) As such, everyone attending should receive the same training and operate under the mindset that they are “always-on.”

 

4. Strength of bench: showcasing leaders across the organization

Investor days present the perfect opportunity to provide investors access to leaders beyond the company’s quarterly “norm,” such as heads of Technology, Operations, Research & Development, Marketing, Sales, etc. With investors becoming increasingly focused on companies’ ability to succession plan, every company should leverage opportunities like this to demonstrate the depth, breadth and strength of their talent to educate investors on the business’ health, potential and sustainability.

Preparing speakers in advance will ensure each is equipped with the right messaging and proof points that align with and support management’s stated investment thesis, reflect the business’ competitive advantages and value proposition. Each speaker should work with leadership and the company’s IR, communications and legal teams to review their individual scripts and rehearse Q&A. All participants should also participate in a group rehearsal. This executive coaching will help demonstrate the speakers’ teamwork, prepare them to relay core messages and answer tough questions crisply.

 

5. Beyond the numbers: the strategic impact of storytelling

The way that a company frames its origins, accomplishments, targets and progress at an investor day is equally as important as the content itself. The most memorable investor events go beyond PowerPoint, and utilize multiple formats, such as videos, demonstrations, virtual or in person tours and Q&A to tell the company’s story. Remember: not every investor is the same type of learner – some are visual while others are auditory – so it’s essential that you develop a memorable presentation that meets all attendees’ needs.

Lastly, infuse anecdotes and real-life examples into every Q&A session, where possible. Investors are asking questions either because something did not resonate with them during the presentation, or they are seeking additional detail on a specific topic. Try not to repeat the company’s key messages in the same way for a second time. Utilize storytelling to communicate your points differently.

 

6. Feedback loop: gathering insights through pre- and post-event surveys

In advance of any investor day, poll the needs of your analysts and investors to better understand their interests and concerns as well as their expectations for the event. After your investor day has concluded, follow up with attendees to thank them for attending and solicit their feedback. Creating an effective feedback loop also helps show that the company values investors’ insights and welcomes their suggestions for future events. We recommend that this be done via a short survey (5-8 questions) with primarily multiple choice and Likert scale (strongly agree à strongly disagree) questions. Given that the time of investors is limited, the only open-ended question included in the survey should be: “Is there anything that the company didn’t cover that you wish it did?” This feedback will then open the door for the company’s IR department to further the conversation with each inquiring investor directly.

Leadership should compare the attendees’ comments to the company’s initial goals. While survey feedback does provide a good indication for how the investment community perceived the event, companies should also monitor buying/selling activity, analyst commentary and overall changes in market sentiment following the event.

 

While an investor day is a significant undertaking, it can directly impact a company’s reputation, perception and valuation, so dedicate the time, attention and resources to ensure you’re able to effectively bridge the gap between preparation and “perfection.” While no simple feat, the outcome is consequential. Investor days should be part of a campaign and not treated as a one-time event or replacement for consistent engagement and edification sessions with investors. In fact, there is no such thing as “too much” edification for any stakeholder group; hence, every company should reuse its investor day content across audience groups – employees, customers, suppliers, etc. – to ensure a balanced understanding of the “problem” the company is solving for and the growth opportunity that lies ahead.