How Much Time a CEO Should Spend on Investor Relations

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As Warren Buffett says: “Time is the one thing you cannot buy”.  The time that a CEO spends on investor relations is valuable time away from customers, prospects and employees.  If the time a CEO invests is productive, it has a profound impact on the value of the business. But too often CEOs spend far too much time on unproductive investor relations activity that not only has diminishing returns but, in fact, kills value. 

 10% to 20% of a CEO’s time should be allocated to investor relations

Time spent interfacing with investors will naturally fluctuate based on business developments and capital needs, but over the long term a CEO should dedicate between 10% to 20% of his time to investor relations including such activities as one-on-one calls and meetings with investors, quarterly earnings activities, roadshows and conferences.  If a CEO consistently dedicates more than 20% of his schedule to IR, then his team is not effectively prioritizing for him.  Conversely, if a CEO consistently spends less than 10% of his time on IR activities, he risks a disconnection with Wall Street that will hinder his ability to build an aligned shareholder base, obtain a higher valuation and garner efficient access to capital.  

 An Investor Relations event every six weeks   

Another good benchmark is that a public company should have an investor relations event every six weeks, whether it is an earnings call, roadshow, conference participation or open house.  This volume tends to offer the right access to senior management beyond the quarterly earnings calls.

 Too much investor engagement can hurt your valuation

At IMS, we are strong proponents of public companies getting out to tell their story. CEOs who are always available or out presenting at every investor conference, however, risk being perceived as overly promotional. This makes most investors nervous.  Investors also wonder, correctly, who is running the company if the CEO is spending most of his time presenting to the investment community. 

 The CEO must participate, at some level in the investor relations process 

 Many companies have a President, COO and/or CFO who can articulate the vision for the business, and this is helpful in alleviating demands on a CEO’s time.  But hearing the CEO’s vision directly from the CEO cannot be replaced.  Investors, particularly in the small to micro-cap arena, are frequently “buying management”.  Investor comfort with the CEO can make the difference between premium multiples and average multiples.

At IMS, we are responsible for driving strategic investor relations programs. CEOs typically trust us to own the investor relations portion of their calendar, and we are committed to ensuring that the time is well spent. 


John Nesbett, President, IMS