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A deeper dive into the emerging challenges affecting Investor Relations

FGS Global recently participated in the IR Magazine Europe Think Tank in London for senior Investor Relations officers, to discuss the most pressing issues IR professionals are facing to support their companies in managing intricate current and new global phenomena.

Held at Bank of America’s offices, the conference hosted experts from a wide range of different fields, including our very own Equity Advisory and IR partner Joanna Darlington who provided insights on a panel discussing how to navigate ‘poly-crises’ and build resilience. Other topics addressed included the mounting relevance of ESG and Sustainability, opportunities and threats emerging from digitalisation and AI as well as the intrinsic difficulties permeating relationship management in an increasingly hybrid world.

The debate was lively and intriguing and resulted in actionable recommendations for investor relations professionals.

Our top 5 insights from the day:

1. In an ever-challenging and changing macro environment, IROs should think like an activist

  • Analysing investor behaviour, identifying emerging themes such as supply change vulnerabilities, and recognizing potential activist interests will enable IROs to proactively address market concerns and shape the narrative.

  • IROs should continuously assess and break through the noise of the market to communicate their company's value proposition, highlighting growth opportunities to arise from challenges as well as operational efficiencies, and strategic initiatives.

  • It’s lonely at the top. Supporting management and managing expectations internally as well as externally will help forge strong partnerships equipped to navigate difficult periods.

2. AI is now fuelling investor conversations and showing potential to drive game-changing efficiency in IR

  • IROs must be prepared to answer detailed questions from investors on the potential impacts of AI on their company and the wider industry

  • Synthesis of large data volumes, IR material drafting and sentiment predictors are ways in which AI is commonly expected to help drive efficiency in the IR function

  • Few to no companies appeared to have an AI policy already in place, but proactive and early engagement with emerging technologies is viewed as the most helpful approach to effectively grasp opportunities and tackle threats

3. Commitment to an effective ESG strategy and transparent disclosure on its delivery is now an objective rather than subjective obligation

  • As ESG investment matures, insufficient disclosure on ESG metrics is no longer acceptable and published data is subject to intense scrutiny

  • Investors welcome a shift from use of softer, emotive language in investor focused ESG materials towards a more factual, data-driven approach, linked to the investment case

  • Dedicated factsheets and events encouraged to ensure clarity and accessibility of important information

4. Investors call on companies to cut through noise of the market and provide clear position on value and opportunity

  • Landscape is showing a preference towards businesses showing profitable and sustainable growth, as cash burning becomes increasingly frowned upon in the high-yield economic environment

  • Equity investors thinking more like credit, keeping a close eye on indebted companies and refinancing

  • With competition remaining tough, small caps encouraged to experiment with fundamentals analysis and thematic investor targeting to tap new pools of capital

5. With a hybrid world broadening possibilities for investor interactions, tailored, nuanced and proactive engagement remains essential to preserve meeting quality

  • Non-deal roadshows are no longer seen as the definitive model of engagement as virtual engagement provides opportunities for on demand discussions with management

  • IR activity levels are being maintained or increasing as companies are choosing not to withdraw from public view in challenging times

  • Taking a forensic KYC approach to meeting investors and adapting meeting communication style to different audiences are ways in which seasoned IROs maximise meeting potential

If you have any questions on any of the points discussed, please contact: Sarah Morgan or Joanna Darlington.