NIRI-Chicago's 2010 Investor Relations Workshop - Challenge, Connect, Change - provided a forum for IR practioners to learn how to better meet the many challenges of the changing business and regulatory environment as well as connect with other IR professionals. This article summarizes key learnings from the keynote speech at this Workshop.

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22 D e c e M B e r 2 0 1 0 iR update
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inancial regulatory reform and
the ability to influence significant
issues are just two factors that have
increased the prominence and importance
of investor relations today.
“investor relations stands at a pivot point
within the company with important con-
nections to investors externally and with
finance and corporate reporting, governance
functions and media relations internally,”
says Alan Beller, former director of the
SEC’s Division of Corporation Finance and
current partner at Cleary Gottlieb. “This
broader set of relationships puts investor
relations in a special place with special
responsibilities requiring expertise in an
increasingly broad range of subjects.”
Beller made this case in his keynote
speech—“What’s New at the SEC?”—at
the Chicago chapter’s iR Workshop in
September. This full-day event, which
attracted 100 participants from across
the Midwest, featured formal sessions
on financial reform, earnings guidance/
disclosure and social media. The work-
shop also included interactive, small-
group discussions on current topics and
what-if scenarios.
Apply This Advice
Focusing on three areas—enforce-
ment, disclosure and financial reform—
Beller provided some practical advice.
He first addressed the SEC’s more
aggressive enforcement efforts, citing
the case against Citigroup over materi-
ally misleading statements about its
subprime assets exposure in 2007.
This action included an administrative
proceeding and an
$80,000 fine against
Citigroup’s former iRO
for his role in drafting
and approving the
disclosures, which he
should have known
were materially mis-
leading based on infor-
mation available to
him at that time. The
lessons for iROs are:
• Pay attention to what comes across your
desk. Watch for red flags, and follow up.
• Make independent, professional judg-
ments about materiality.
• Make the financial disclosure process a
collaborative effort across the organization.
• Include lawyers early, and involve them
in judgments of materiality.
Beller also discussed the emerging SEC
focus on consistency across all investor
communications, including periodic SEC
filings, news releases, earnings scripts
and investor presentations. in essence,
the performance metrics that companies
Investor Relations at the Pivot Point
use internally to measure success and that
are discussed in investor presentations
should also be included in periodic fil-
ings. Recent changes in compliance and
disclosure interpretations make it easier to
include non-GAAP financial measures in
SEC filings.
Dodd-Frank Implications
Finally, reinforcing themes heard earlier
in the workshop, Beller addressed the
iR implications of the proxy access and
executive compensation provisions of the
Dodd-Frank Act. Relative to proxy access,
he pointed out that the same factors that
make companies a target for criticism—
poor performance, accounting difficulties
and hot-button governance issues—
increase the likelihood of shareholders
seeking proxy access. However, having
sound board policies on governance, exper-
tise and succession lessen the risk. Beller
advised iROs to:
• become governance and compensa-
tion experts;
• know their major institutional inves-
tors, including the people who have voting
authority over their shares; and
• develop strategies for engaging in
constructive dialogue with investors before
issues arise.
Contributed by Lisa Ciota, vice president-program-
ming of the Chicago chapter and principal, Strategic
& Investor Communications, Downers Grove, Illinois;
lisa.ciota@gmail.com.
Go to www.niri-chicago.org/workshop for an archived webcast and written summary
of Alan Beller’s keynote presentation as well as a detailed recap of the IR Workshop.
alan Beller pointed out that the same
factors that make companies a target
for criticism—poor performance,
accounting difficulties and hot-button
governance issues—increase the
likelihood of shareholders seeking
proxy access.