Trust and Transparency
Braskem’s José Marcos Treiger discusses his work as an officer responsible for Investor Relations
written by ◦ João U. G. Sant’Anna photos by ◦ Luciana De Francesco

They work at the forefront of capitalism – financial marketing. Their job is to conduct an economic analysis of a growing group of shareholders made up of people who make lifelong investments to ensure a comfortable retirement, as well as institutions that make massive investments every day to ensure their solidity and growth.

They deal with information that can be expressed mathematically, as well as things as fragile and ephemeral as credibility, trust and reputation.

For them, the world is divided into the sell-side (banks, brokers, investment analysts), which represents the interests of the companies seeking the resources they need to grow; and the buy-side: institutional investors that manage other people’s money, such as pension funds and insurance, as well as private investors. They are professionals who multiply the value of businesses, develop markets and influence financial transactions worth trillions of dollars. Their profession: investor relations, or simply, IR.

“This is a strategic activity aimed at establishing closer relations between a publicly traded company whose shares are listed on the stock market, and investors,” explains José Marcos Treiger, the Braskem officer responsible for IR. “It involves corporate communications, finance and marketing, and provides investors important and accurate information about the company’s performance. Among other things, it enables the company to play a more active role in the process of developing its own share prices, as well as maintaining and improving its credibility.” When they do their work effectively, says Treiger, IR professionals can increase the company’s market value in the long-term while reducing capital costs.

The people responsible for IR act as intermediaries in communications between companies and the market in general. “This sort of communication is important and has grown tremendously due to the global competition for investors and capital that now includes China, India and other emerging economies, as well as Brazil itself,” explains Treiger, who has closely followed developments in the Brazilian market for years – first at Aracruz Celulose, then at the newly privatized Companhia Siderúrgica Nacional - CSN, and since October at Braskem.

Until recently, RI was called Market Relations in Brazil. It existed to fulfill a legal requirement, and was usually included in the responsibilities of a company’s CFO. According to Treiger, the watershed happened in 1992, when Aracruz became the first Brazilian company to list its shares on the New York Stock Exchange. Since that pioneering move, Brazil has risen to third place among countries with the largest number of non-US companies traded on Wall Street. The United Kingdom is number one, followed by Canada. Thirty-five major Brazilian companies are listed.

“When someone is exposed to a sophisticated market – and the Brazilian market wasn’t as sophisticated back then as it is today – they realize that the market is a two-way superhighway: it provides resources but demands accurate, transparent and impartial information in good time and on schedule, observes Treiger. “Whenever something important happens in a company, the market wants to know about it in order make informed decisions on whether to keep, buy or sell that company’s stock.”

The people responsible for IR deal mainly with financial analysts, but it is also important for them to keep a channel of communication open with all stakeholders, including company members, clients, suppliers and the community.

“The field of investor relations is closely linked to credibility and reputation,” says Treiger. “Anyone working in this area must maintain their credibility in the market, because once it’s lost it is almost impossible to regain. If you provide incomplete or false information that leads thousands, or even millions of people to invest in your shares, and then come back tomorrow with a different story, there’ll be hell to pay. We have to avoid that sort of behavior like the plague. At the same time, companies must develop a culture of good governance and transparency and release certain amounts of strategic information. We have to determine the optimum level of strategic planning that can be made public in order to allow investors to predict the company’s future results, bearing in mind that the market doesn’t like surprises. As a result, we will develop an outstanding image in the market that will differentiate us from other publicly traded companies – our competition.”

If a company gains a reputation for refusing to divulge information, people will lose interest in its shares, says Treiger. “Another important aspect of the job is business information. There are certain kinds of business information that are kept secret in a private, family-owned firm, but it’s a different story for publicly traded companies. We have to provide enough information about the company’s business performance so analysts can adapt their mathematical models and predict its future performance.”

Following the publication of Braskem’s results for the second quarter of 2005 and accumulated results for the second half of the year, the company’s IR team was deeply involved in the final preparations for Braskem Day at the New York Stock Exchange. September 6 was devoted to Braskem on Wall Street, and the company took the opportunity to celebrate its third anniversary. Braskem’s Entrepreneurial Leader (CEO), José Carlos Grubisich, gave a presentation to American market analysts on Braskem’s recent performance and plans for growth at the Board Room of the world’s most important stock exchange. Then, at 4 pm, Grubisich was invited to ring the famous NYSE bell to close the day’s trading. That event was seen around the world on television and the Internet.