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U.S. financial markets are facing unprecedented change, and no one is more aware of it than investor relations officers, whose job it is to manage how public companies communicate with their shareholders and report back to the C-suite and board on shareholder sentiment, including warning signs of activism. “IR is moving from a primary communications function to become more of a strategic role at the intersection of capital markets and governance and corporate strategy,” said Alyssa Barry, president of investor relations at Alliance Advisors IR. “Investor relations officers are increasingly reporting into CFOs and having more of a voice at the table than they have had in the past and are part of some strategic decisions,” said Lauren Puffer, managing director, M&A shareholder advisory at TD Cowen and a former advisor to IROs. “Not only because they're able to inform management and the board about what shareholders and investors think about a company's stories, but how that actually informs strategy going forward.” A regulatory reset Recent actions and guidance from the Securities and Exchange Commission (SEC) are quickly redefining the rules of engagement between companies and shareholders but often in ways that remain unsettled. New interpretations around Schedule 13D and 13G filings have broadened what it means to be “influencing management,” creating uncertainty for institutional investors and by extension companies trying to engage with them. The immediate effect has been a chilling of dialogue, according to various sources who spoke to DMI, as institutional investors have become more cautious in meetings, often limiting how directly they express their views. That in turn reduces the quality of feedback companies receive from shareholders. Rather than retreating, advisors to boards say IR officers will need to do more, expand outreach, engage a broader base of shareholders including retail and develop more structured communication processes to compensate for reduced candor from large institutions. "You actually need to lean into more shareholder engagement, not less, in this environment,” said Erik Gerding, a partner at Freshfields and former SEC official. “One approach is going to smaller shareholders who are below the 13D[G] threshold. They might actually be thrilled to talk to management because they usually don’t get the same level of attention.” Disclosures for algorithms, not analysts The second big development this year is artificial intelligence, which is transforming how IR communications are both sent and received. Systems trained to process large volumes of data can scan filings, earnings transcripts and news coverage in seconds, producing synthesized views that shape initial impressions of both institutional giants and individual retail investors. Citadel, for example, recently launched an AI tool to parse disclosures and generate insights for portfolio managers. Retail investors, meanwhile, are increasingly turning to AI for investment advice rather than traditional financial advisors. On the stewardship front, JPMorgan is now basing its U.S. proxy voting decisions on an AI-driven model based on structured data and voting policies. But for every purpose-built system with guardrails and processes, many other investors are using entry-level AI tools the way they previously used search engines. “It is the first place a lot of people are looking for information,” said Nick Capuano, partner at Kekst CNC, adding that for many investors the first point of research about a company is no longer an analyst report but an AI-generated summary. “At a time when people are looking to ChatGPT, Gemini and Claude for information on companies, you should be positioning your information a little bit differently to make sure that your facts are reflected appropriately in those engines,” said Capuano. IR officers must now think about “AI optimization” to ensure messaging is consistent, clearly structured and machine readable across all public channels. “If you think about these models scraping every source of public information, it is very difficult to know how [the AI] is going to pull,” said Puffer. “The clearer and more concise you are, and the less jargon you use, the more it’ll get picked up and better understood by these models.” Investor relations departments at companies such as shoe brand Skechers USA and networking systems and software provider Ciena have reportedly begun using generative AI to help prepare their earnings commentary, according to reporting by the Wall Street Journal and others. IROs can also leverage datasets, including those provided by Diligent Market Intelligence, to understand the proxy voting decisions stewardship teams make, and the data that they are based on. Those include voting histories, rationales, and policies, as well as benchmarked governance and compensation data. “We leverage it AI within our own investor relations advisory firm by being able to screen sentiment in chat rooms, identify short sellers and identify potential risks leading to short selling through sentiment monitoring, media monitoring or social media monitoring,” said Barry, although she noted that AI will never replace vital human qualities such as a “good gut feel” or being able to “read the room” based on years of personal experience. The new IR mandate Regulatory constraints are making traditional engagement more difficult. AI is making it easier to spot inconsistencies, underperformance or dormant narratives in public data. Together, those forces are creating new opportunities for shareholders to challenge companies. “Activists [investors] have always preyed on market dislocation,” Capuano said. He and others note that if regulations reduce the scope for private dialogue, activists may pursue more public campaigns supported by data and amplified through digital channels. They can also mine filings, transcripts and historical statements, often with their own AI tools, to construct stories about strategy drift, governance failures or misaligned incentives. The upshot is that the IRO role is evolving from managing relationships to managing a system, one defined by technology, regulation and an increasingly contested shareholder landscape. “You need people with a really wide-ranging skill set, and not just the ability to pick up the phone and call investors but the ability to really act as an advisor to management and the board,” said Capuano.
