How companies are adapting to the crisis – reports from our peers in the UK and USA
IR Society – COVID-19: SNAP POLL OF IROs from May
Among the findings, almost half of IROs confirmed that virtual meetings represented less than 10% of investor engagement before the crisis, while 80% indicated that they would be conducting a greater number of virtual roadshows and meetings in the future. 42% of companies surveyed have temporarily reduced or donated board-level salaries as a result of COVID-19, with examples detailed in the report. Of those companies, 60% have also cut their dividend.
Few companies had fully embraced virtual IR prior to the crisis. Virtual meetings represented less than 10% of investor engagement, with some of those citing no virtual meetings at all. Of course, at the present time the choice is binary; conduct meetings remotely or not at all. But, as we emerge from the crisis, the technology that we have all embraced over recent weeks may become a mainstay for investor engagement with a greater number of virtual roadshows and meetings in the future. This may be easier to do for 1-1s and where relationships have already been established, for example updating long-term shareholders after results.
This is a learning-curve, with frustrations over technology and connectivity, and there are inevitable questions about how to communicate effectively, in particular for larger events such as results presentations, group investor meetings and capital markets days. Whilst the value of face-to-face interactions is unlikely to abate, some of the advantages of virtual meetings are becoming clearer. This includes the ability to reach a wider global audience and to reduce or eliminate travel, thereby allowing for a greater number of meetings in any given period, freeing up senior management’s time, and having a positive impact on the environment.
The corporate website plays an important role, not only in communicating with the financial community, but also with a much broader range of stakeholders such as regulators, media, employees and strategic partners. Interestingly, among respondents, only 43% confirmed that they have created a COVID-19 landing page on their corporate website. As a first port of call for many users, this can be an opportunity to include easy-to-find links to recently published results or other COVID-related updates, and could also include information about the company’s debt maturity, liquidity and covenants. Potentially easier to implement than a new web page, 62% of respondents confirmed that COVID-19 specific slides had been included in investor presentation materials. Overall, included in those previous numbers, 18% of IROs had included both, whilst, perhaps surprisingly, 13% indicated that neither the company’s website nor presentation materials had yet been tailored to the crisis.
NIRI in the USA: A COVID-19 Survey conducted in May
How the COVID-19 crisis has impacted work and the world of IROs. Almost 200 corporate practitioners, IR counselors, and service providers participated. Here are a few highlights:
1. Most respondents (71 percent) said their average daily workload had increased significantly or moderately.
2. More than a third of corporate IR practitioner respondents (36 percent) said the pandemic had elevated their professional stature or the importance of the IR team within their companies.
3. When asked to rank the significance of current challenges, corporate IR and counselor respondents ranked the following as the most significant:
- Uncertainty about how the pandemic will impact your company/clients (69 percent)
- Intraday volatility and the impact of high frequency trading/algorithmic trading (62 percent)
- Lack of transparency around investors’ long and short positions (44 percent)
4. More than half (53 percent) of corporate IR and counselor respondents reported an increase in investor or analyst requests for calls/meetings with C-suite executives, as compared with the same period in 2019.
5. Ten percent of respondents said they had noticed an increase in share purchases by hedge funds or other activists during the pandemic, while another 20 percent said they were unsure but believed that was happening.
6. Eighty-two percent of respondents said modernized 13D disclosure rules would help their companies or clients be better prepared if an activist were to take a significant position.
7. Nearly 45 percent of respondents said they had noticed an increase in short-sale activity in their company’s stock (or believed that was happening) since the start of the crisis.
8. Virtually all (94 percent) of corporate IR and counselors surveyed agreed that modernized 13F disclosure rules would help them be better prepared for activism and respond more effectively to investor requests for time with C-suite executives.
The survey also revealed the emotional toll of the pandemic. Many respondents shared how the virus had impacted them personally beyond their company’s financial results:
Managing work from home with small children is a personal challenge. Missing hallway conversations with CEO and CFO to be updated on business progress and quick preps for investor touchpoints.
Absorbing and synthesizing the daily flood of internal and external information is like drinking from a fire hose.
My workload has increased substantially, and earnings preparation time has increased exponentially. The uncertainty in the future is very challenging, and colleagues are experiencing stress and burnout from changing how they work in this environment (remote work, video calls, etc.)
This is not a work-from-home job. Conference calls just don’t work. We have reached out to investors to offer brief calls of 10-15 [minutes] for check-ins, but since we cannot give numbers due to upcoming earnings, only a few have accepted.
[My] company has taken dramatic cost cutting measures — reduced pay for everyone, no opportunity for bonuses in 2020, no merit increases in 2020; there is great uncertainty about the rest of the year; you can feel the tension even though everyone is at home.
The amount of materials, webinars, emails, reports has been astonishing — impossible to keep up with it all.
Planned raises have been postponed corporate wide. Investor call requests have increased significantly (in a positive way). 1Q earnings reporting will be more challenging with everyone working from home. Believe some of us will have to return to the office to work as we get closer to earnings release/call.