How the global IR associations are providing training for their members
The role of the IR professional has never been more important. The globalization of financial markets and the ever-changing complexity of the legal and regulatory environment have placed great emphasis on staying up to date on developments – IR certification can play a major role in this regard.
As Andrew Mills, partner at London-based consultancy Hydra Strategy and former chairman of the UK’s IR Society, explains: ‘As IR has continued to grow in importance as a strategic function central to building corporate reputation, so has the need for IROs to be fully on top of their game.
‘When just one mistake can have significant consequences, it is critical that the individuals entrusted with representing a company and dealing with key stakeholder audiences have the necessary skills, experience and regulatory awareness.’
So if this is the challenging playing field, what are the respective global associations doing to ensure the players – IR professionals – are addressing the IR certification challenge? A great deal, in fact.
NIRI: Setting the standard
NIRI, the oldest and largest of the professional IR associations, is often looked to as the ‘standard setter’, according to Gary LaBranche, its president and chief executive. And there’s a reason for this: NIRI launched the first US-based benchmark for the IR profession, the Investor Relations Charter (IRC), to fulfill an expressed need of the IR community.
‘Earning a professional designation is very important these days,’ observes LaBranche. ‘More than 1 mn certifications are awarded each year in the US, according to a study conducted by the Georgetown University Center on Education and the Workforce.’
The potential benefits of the IRC qualification include the validation of specialized knowledge, enhancement of professional credibility, demonstration of professional commitment, attainment of a practice standard, professional growth and development, and influence on career mobility.
‘Before the existence of the IRC, the IR core competencies, knowledge and skills for competent performance had never been defined,’ notes LaBranche. ‘The IRC can positively affect the profession by defining its best practices, raising awareness through a rigorous credential, providing a service valued by professionals and employers alike, and increasing the legitimacy of NIRI to be a voice for members to government officials.’
Globally recognized standard Complementing NIRI’s mission, the objective of the IRC program is to maintain a globally recognized standard through the development of a certification program and to advance the practice of investor relations and the professional competency and standing of investor relations practitioners.
‘The IRC program development was a very thoughtful, deliberate and rigorous undertaking,’ points out LaBranche. ‘With the extensive help of highly regarded experts from the investor relations profession, and guided by reputable consultants from the credentialing field, the main components of the IRC program were defined.’
These components are the eligibility requirements, competency framework, examination blueprint, renewal requirements, code of conduct and all related policies and procedures. These aspects of the program were developed following credentialing standards and best practices and were based on a formal study called the Job Task Analysis.
The new IRC renewal program model is also based on the findings from the Job Task Analysis and related studies. Its purpose is to promote the continued competence of IRC certificants, where competence is defined as demonstrating specified levels of IR knowledge and skills at the time of initial certification and throughout an individual’s professional career.
The IRC renewal program includes various types of activities, including professional engagement, membership, speaking, presenting and writing, building knowledge and skills, attending programs with educational content – such as NIRI’s annual conference, seminars and workshops – attending select IR Magazine events, and contributing to the IR profession through mentoring, coaching and volunteering.
‘The requirements and procedures that are established as part of this certification program will assist the credential holders in maintaining competence and staying abreast of all new industry changes,’ asserts LaBranche.
Overall, there are an impressive 172 credentialed IR corporate practitioners and counselors in the US and overseas, including IR practitioners at 114 publicly traded companies; 41 percent of these professionals hold a vice president title or higher. ‘These certificants represent a wide demographic spectrum and have an average 11 years of IR experience,’ adds LaBranche.
Planned enhancements Are there plans to develop the certification program? ‘Thanks to our committed volunteers and subject matter experts, efforts are constantly taking place to identify opportunities for enhancement and improvement to meet best practices and keep the program valid and relevant to the IR profession,’ says LaBranche.
From an operational perspective, NIRI recently upgraded its credentialing engine, which will streamline the submission of exam and renewal applications, connect certificants with their completed professional development units and allow certificants to identify and focus on areas of deficiency in a more structured and objective manner.
LaBranche also points out that the IRC holds wider benefits for the IR community. ‘It is the only US-based certification for investor relations practitioners and will be the must-have validation of IR competence,’ he explains. ‘It takes a long time to create awareness of the existence and importance of a voluntary credential. As the IRC becomes a more recognized credential, it will broaden awareness of the importance of IR.’
IR Society: Demonstrating knowledge
IR Society CEO Gary Davies has a unique take on the UK association’s IR certification. ‘Having passed both the CIR and DipIR qualifications myself in the last few years while working as an IRO at GSK, I found the courses a great way to consolidate knowledge and understanding of the IR role and start to build a peer network of IR professionals who are working their way through the qualifications at the same time,’ he says.
Indeed, there is no doubt that the IR Society’s Certificate in Investor Relations (CIR) is an internationally recognized and highly regarded qualification for the IR professional, with around 1,500 IR practitioners holding it. ‘The CIR has become very highly regarded and we get a steady stream of IR professionals attending our Coleman Street office [in London] to sit the exam,’ says Davies. ‘Importantly, it is increasingly being recognized by employers seeking high-quality IR professionals.’
The IR Society has a growing number of partner associations internationally that work with it to provide the certification to their own IROs. These include long-standing collaborations with the Middle East, Latin America, Hong Kong, Malaysia, Singapore and Europe. ’Our most recent addition to our partner associations is with Spain,’ notes Davies.
The CIR was launched more than 10 years ago, since when it has been reviewed and updated based on the evolving needs of IR professionals. The program covers:
‘The certification is supported by a program of professional development courses,’ notes Davies, adding that it helps IROs in three ways. One, it provides international recognition as a qualified IR practitioner. Two, it demonstrates competence and growing expertise. Three, it enhances career development.
‘We regularly review and adapt the content of the CIR to ensure it remains current and fit for purpose,’ Davies notes. ‘The IR Society’s examinations committee gives direction to, and maintains oversight of, the standards expected from the CIR. The society’s education committee oversees the curriculum and robustness of the coursework, training modules and other facilities, including the online mock exam.’
In the last couple of years the society has also introduced an additional senior-level qualification: the Diploma in Investor Relations (DipIR), which has recently completed its second program.
CIRI: Advancing IR
‘CIRI’s Certification Program and Certified Professional in Investor Relations (CPIR) designation establishes a standard of skills and knowledge for IROs, thereby advancing the stature of the IR profession overall,’ says Yvette Lokker, CIRI president and chief executive.
CIRI ensures the Certification Program and CPIR exam cover all of the relevant areas of this multi-disciplinary role, including accounting, finance, capital markets, securities law, corporate governance, communications and strategy.
‘While all these areas are crucial to the IR role, greater emphasis is placed on accounting and finance so that IROs have a deep understanding of financial statements in order to credibly interact with capital market stakeholders and establish a standard of practice across the IR profession,’ says Lokker.
When developing the curriculum for the Certification Program, CIRI worked with a team of IROs to identify their key areas of responsibility for IR professionals. Since launching the Certification Program in 2011, CIRI has had more than 120 people participate.
Cliff: High standards
French IR body Cliff’s IR Fundamentals certification course has three main attractions. One, Cliff is associated with one of the best universities in France, the Université Paris-Dauphine. Two, the certification process is based on practical teaching conducted by experienced professionals from listed firms of different sizes and sectors. And three, Cliff has developed an efficient framework that involves academic and professional mentors during the whole process.
Olivier Psaume, chair of Cliff, says the certification has real practical benefits for the IR professional. ‘It allows IROs to become rapidly operational because of the concrete approach of the training,’ he explains. ‘Teachers come from a range of disciplines: IR, auditing, legal, academia. The certification also helps candidates to efficiently address international investors, thanks to specific communication skills.’
Since 2014, 90 people have taken the IR Fundamentals certification course and 80 have passed. Only two failed; others stopped for personal or professional reasons.
‘Each year we review the content of the certification as a result of regulatory change such as Mifid II and the Market Abuse Regulation,’ says Psaume. ‘We are giving more emphasis to social responsibility matters as they are increasingly scrutinized by investors, but also focusing on governance, compliance issues and ethics.’
Meira: Measuring the IR impact
John Gollifer, general manager of the Middle East Investor Relations Association (Meira), highlights why IR certification is so important.
‘In any industry, we seek a benchmark against which to measure our progress – and IR is no different,’ he explains. ‘It is important for emerging markets to be in a position to measure themselves against other markets, including developed markets. In this way, notwithstanding similar international market principles, we can develop best practice in the context of our own operating and regulatory environment.’
A key element of the Meira offering is professional development and the Certified IR Officer (CIRO) qualification, which provides the industry benchmark in the region. For some years, Meira has worked closely with the UK’s IR Society to deliver the CIRO in the Middle East. The program offers a broad sweep of IR, from important principles to the practice of IR. Its contents were developed by IR professionals and continue to be reviewed on an ongoing basis.
‘Importantly, the CIRO covers what we consider to be the essential technical components to operate safely as an IR practitioner, from company law and market rules and regulations to finance, accounting and investment valuation,’ says Gollifer.
‘Given its breadth, the CIRO components serve as a useful reference manual for IR, and the examination that CIRO candidates take is a good test of their knowledge and application of IR. It is no coincidence that many other international markets, from Asia to Latin America, also use the same components. IROs generally consider the certification program a useful benchmark that provides a comparison with their international peers.’
More than 100 candidates have taken the CIRO exam since Meira started offering it in 2013. On the future, Gollifer notes: ‘We are happy to continue rolling out the CIRO to all Meira chapters in the region – we’re already up to 10 markets today – and this will keep us busy.’
Irpas: Professional recognition
The Investor Relations Professionals Association Singapore (Irpas) believes capturing best practices and offering a certification program are natural ways to enhance the professionalism of investor relations in the region. The Irpas offering is the International Certificate in Investor Relations (ICIR).
‘The ICIR is based on the new international syllabus provided by the UK’s IR Society,’ says Harold Woo, Irpas president. ‘It is an internationally recognized qualification in investor relations and regarded as an essential prerequisite for people keen to enter the industry due to its comprehensiveness. It also allows the senior practitioners to benchmark their own knowledge against industry standards.’
The association’s main focus is the fundamental principles and practice of investor relations as well as factual knowledge of both the regulatory requirements and the financial and market environments within which the IRO is able to operate effectively.
‘We continue to see new candidates signing up for the examinations, which we have conducted twice a year since we introduced the ICIR in 2014,’ says Woo. ‘We have had senior IR practitioners including CFOs taking part in the certification program.’
Irpas is looking to introduce an IR Professional Development Program to promote professionalism, improvement and skill development for experienced IR practitioners to advance to a higher level of skill in IR.
‘The program would cover the strategic value of IR, finance essentials and corporate governance and ethics,’ says Woo. ‘The curriculum will be interlaced with case studies to enhance the learning of effective communication with all the company’s stakeholders. It will be designed to help IROs engage in investor relations activities to create a path to successful outcomes on an ongoing basis.’
