Are IROs an Untapped Source for Board Service?

by TK Kerstetter for The Board Blog, December 15th, 2010.

If you have to ask what an IRO is there is a good chance that you won’t think this is a very good source for new directors.  IROs are investor relations officers and like their counterpart, the corporate secretary, they perform an important function as a resource to the board in dealing with the shareholders/investors who hold your stock and re-elect the directors. I actually had this epiphany when I was speaking at the National Investor Relations Institute’s Senior Roundtable Annual Meeting, a gathering of some of the most respected IROs in the business.

I was at the conference to talk about the relationship between the board and the investor relations department, but my “aha” moment came when I was reading the bios of the talent in attendance. Many of these IROs previously had illustrious careers in accounting or treasury departments where they had learned an enormous amount about the operations of their company’s primary business. Their 5+ years in IR had then expanded their knowledge in everything from corporate governance to financial reporting.

Now when I say financial reporting, I’m talking about not only understanding quarterly earnings but also having the knowledge to handle detailed explanations of the business to answer queries from hedge funds and shareholder activists. Furthermore, years of being involved in road shows and responding to new disclosure regulations have made IROs very valuable to the CEO and quite the knowledgeable staff member in general. (continue reading… )

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