How to make an equity story

The equity story is usually treated as a narrative problem: find the story, tell it well, secure attention. That is the wrong starting point. An equity story is not a story in the literary sense, and it is not a feat of presentation. It is the company's structured account of how it creates value over time. Its purpose is not to raise the valuation, and not to win attention. It is to let investors form their own judgement at the lowest possible cost to the company.

This places the equity story inside the purpose of investor relations rather than inside marketing. As I have argued in The purpose of investor relations, the primary goal of IR is to reduce the cost of financing the company, and the secondary goal is to protect and develop its commercial leeway. A higher valuation, pursued directly, tends to corrupt the work – it tempts you to emphasise what flatters and to under-communicate what does not, and investors who sense this raise their required risk premium. The equity story serves the correct goal only when it is built to support independent valuation and to reduce the perceived risk of making one. Build it to impress, and it will quietly do the opposite.

An equity story is a structure, not a story

The familiar ingredients are well known: purpose, market opportunity, business model and value drivers, competitive advantage, long-term goals, capital allocation, the execution plan, metrics, risk, and governance. This list is, in substance, FCLTGlobal's Ten elements of a long-term strategy, first set out in Straight Talk for the Long Term (2015) and now circulating in various repackaged forms. The elements are sound. As a checklist, they are also dangerous, because they invite a company to satisfy the form without the substance – to assemble a complete-looking account that the underlying conduct does not support.

The distinction I keep returning to applies here too. The equity story belongs to the foundational layer of a company's communication, not the situational one. It should be traceable to the company's defining characteristics and its genuine value-creation logic, not to the pressure of the current quarter. A story assembled from situational convenience will be contradicted by events, and the gap between the account and reality will, eventually, collapse – at which point the story raises the cost of capital it was meant to lower.

Conduct comes before the story

The order matters. You cannot write your way to a credible equity story; you can only describe one that is already credible. If the value drivers you would like to claim are not the drivers the business actually has, the exercise becomes persuasion rather than disclosure – and the market prices persuasion as risk. The discipline, therefore, is to make the account true before making it articulate. Where it is not yet true, the honest output of the work is not a better paragraph. It is a better decision.

It is built by listening, not by drafting

An equity story is the output of a two-way process, not a desk exercise. You cannot construct a defensible account of how you create value without first understanding how your investor base actually values you – which drivers they already believe, which they discount, where trust is thin, and what they will contest. That understanding comes from listening, which is the part of the discipline that cannot be controlled and is therefore the part most often skipped.

This is the reasoning I set out in The emergence of a stakeholder-relational logic in corporate communications and in CSRD is institutionalising listening: begin with stakeholders and their positions, not with the message. Investor relations is, in fact, the oldest application of that logic. The discipline has listened to institutional investors, anticipated their reactions, and read the structure of the ownership base for decades, while the rest of corporate communications is only now catching up. The equity story is where that listening becomes legible.

The story is received emotionally

Even the most rigorous equity story is received by people making an emotional assessment of management's competence, integrity and benevolence. The same set of facts, presented by management the market trusts and by management it does not, produces two different costs of capital. As I argue in It’s emotional, stupid, facts are the content, but the emotional register is the carrier. A complete and accurate equity story delivered without credibility will not lower the required return. An honest, slightly incomplete one delivered by trusted management usually will. This is not an argument for less rigour. It is a reminder that rigour is necessary and not sufficient.

Where the equity story lives

The natural home of the equity story is the results presentation. Place the value-creation framework at the centre, and the quarter becomes evidence of progress against it rather than the subject in itself; the short-term impulse recedes without any change to the reporting calendar. This is also the practical answer to the short-termism debate, which I set out in The case against weakening quarterly reporting: the problem is not the frequency of reporting, but what companies, analysts and investors do around it. A results presentation organised around the equity story is a choice available to every company today, whatever regulators decide.

How to build one

Six steps – a disciplined sequence, not a template to be filled in:

1. Begin with purpose and the value-creation logic, at the level of the reporting unit. Why does the company exist, and how does each part of the business turn capital into returns above its cost? Name the few genuine value drivers and resist the temptation to claim all of them.

2. Place that logic in its market and name the advantage that protects it. Set out management's own view of where the market is going, and the specific, evidenced advantage that lets this company capture value others cannot. Assertion is not advantage.

3. Test it against the market's current view. Listen first. How is the company valued now, which drivers are believed, which are discounted, and where is trust weak? The gap between your logic and the market's is the real subject of the story.

4. Set the long-term goals, and the metrics that track progress toward them. Strategic targets tied to the value drivers, over three, five and ten years, measured consistently rather than reinvented each quarter.

5. Show the plan, the capital allocation, and the incentives behind it. The execution roadmap that links present actions to those goals; the resource allocation – capital and otherwise – that funds the drivers rather than the legacy; and executive and director remuneration tied to long-term value. This last is the element companies most often blur, and refusing to blur it is itself a credibility signal.

6. State the risks, including the ones you would rather omit. Disclosed risk lowers perceived risk; omitted risk, once discovered, raises it. Sustainability and governance risk belong here, as part of the value and risk picture, not quarantined in a separate report.

These six steps cover every element FCLTGlobal identifies in a long-term strategy – purpose, market, business model and value drivers, competitive advantage, goals, metrics, the plan, capital allocation, remuneration and risk. Because that list is, in practice, the catalogue of what the long-term investor whose capital you are actually trying to attract expects to find before forming an independent valuation, covering it is the same thing as meeting that investor's expectations. The only addition is the third step: FCLT tells you what to articulate, but not to listen first. That step is what turns a complete disclosure into a credible one.

Only then write it down – and write it so that it can be defended in a hostile meeting, not merely admired in a glossy deck. The elements are the structure; the sequence is the discipline.

What the equity story actually is

Understood this way, the equity story is not a marketing artefact. It is the company's standing account of why it deserves the capital it employs. Keeping that account true is not an IR task bolted on after the strategy is set; it is part of the conduct that earns a lower cost of capital and protects the company's room to act. It is the same relational discipline that runs through my work on public affairs and issues management – the conviction that legitimacy is built before it is communicated. The story is the visible part. The discipline is everything underneath it.

Get the conduct right, listen before you speak, and the equity story largely writes itself. Get it wrong, and no amount of storytelling will close the gap for long.

My thinking on corporate communications is laid out here: www.jorgenchristiansen.no/how