Communicating with Intrinsic Investors  677
These investors said they favor companies with executive teams that are 
confident about telling their companies’ stories in the way the teams see them, 
proactively choosing how, what, and when to communicate. Many of our sur-
vey panelists considered this approach the opposite of what many companies 
do today. To paraphrase one investor, “An exceptional CEO knows what I 
need to know and tries to persuade me of that. He or she doesn’t try to guess 
what I want to hear.”
Intrinsic investors expressed this as a desire for what they called educa-
tion. One investor told us, “I just need to be educated. Help me understand 
your business and strategy. If I disagree, I don’t have to invest.” They want 
to know what a company’s competitive advantages are and how its strategy 
builds on those advantages. They want to know what external and competi-
tive forces a company faces. And they want to know what concrete actions, 
including talent management, the company is taking to realize its aspirations. 
They don’t want sugarcoating, opacity, or “selling.” They interpret overly 
elaborate presentations as suggesting a potential lack of substance.
Investors also said they want to learn how CEOs make decisions, whether 
a company’s approach is aligned with long-term value creation, and whether 
the whole management team is singing from the same song sheet. This is not 
surprising, given that 23 out of 24 long-term investors taking the survey iden-
tified management credibility as one of the most important factors to consider 
in making investments. Management credibility includes both clarity of deci-
sion making and openness when not everything goes well. One investor put it 
this way: “There are always bumps in the road. You earn trust and respect by 
not trying to sugarcoat. That doesn’t mean the stock price won’t go down. But 
it will mean the recovery will be better because investors will have more con-
fidence in managers who are level-headed and matter-of-fact.” Said another 
investor, “I get them to talk about something other than what’s in their pitch 
book. I want to know how they think. For example, what’s their rationale for a 
particular decision that will increase value?” Another common theme, which 
is supported by research in behavioral psychology, is that managers would 
do well to ensure that the long term and its context are part of every investor 
engagement, especially when talking about short-term results. This approach 
starts with the long term as the wide lens on a business and then zooms in on 
the details as needed. As one investor said, “It’s all about the horizon. Long-
term investors don’t need a lot of detailed guidance about quarterly numbers. 
They need clarity, consistency, and transparency from managers in communi-
cating strategic priorities and their long-term expectations.”
Benefits of Transparency
Many companies are reluctant to provide a detailed discussion of results, is-
sues, and opportunities. Their rationale is that this kind of disclosure reduces 
their flexibility to manage reported profits or will reveal sensitive information