We’re getting to grips with the post-pandemic world but what has really changed in IR? Alexandra Cain asks IR professionals how they are handling virtual, hybrid and the return to in-person meetings – and what it means for enhancing shareholder engagement
When accommodation at the hotel for the forthcoming Stifel Conference in Florida this June sold out in April, the IR community knew it was well and truly back on the road.
‘People are excited to attend conferences and talk to each other,’ says Patrick Davidson, senior vice president of IR at Oshkosh Corporation. ‘So we had to find another hotel – but that’s a good problem to have because we’re getting out and meeting people. We went to our first in-person conferences earlier this year, also in Florida, which is nice and warm at that time of year. It feels good to get back to face-to-face meetings.’
While many IR practitioners are more than glad to be back talking to familiar faces at investor conferences and roadshows, Covid-19 has changed investor relations forever.
Before the pandemic, virtual shareholder meetings such as AGMs were banned in many jurisdictions or tightly regulated. Now, firms are choosing the right meeting format for their circumstances, with many landing on a hybrid model, a mix between broadcast and face-to-face events.
It feels good to get back to face-to-face meetings
Seeing the whites of their eyes Naz Sarkar, Computershare’s global chief executive for issuer services, says that in the UK, companies in the FTSE 100 have largely shifted to hybrid shareholder meetings.
‘But the majority of companies outside the FTSE 100, including those listed on AIM, are holding in-person meetings,’ he points out. ‘UK companies have continued the pandemic practice of letting shareholders ask pre-submitted questions before shareholder meetings for planning purposes.’
In the US, larger companies have also switched to virtual meetings. ‘Many of our US clients found online AGMs created opportunities to engage investors more effectively, particularly those with a geographically diverse shareholder base,’ Sarkar adds.
Overall, however, the number of US client-hosted virtual AGMs is expected to drop during 2022 as traditional, in-person AGMs stage a renaissance. The smaller the shareholder base, the more likely the company is to go back to face-to-face meetings.
Sarkar says that during the pandemic, virtual meetings became the norm in European countries like Germany, where emergency laws enacted at the start of Covid to allow virtual meetings have been extended. In countries such as Denmark and the Netherlands, companies are moving back to in-person meetings, albeit with elements such as online voting and webcasts incorporated into events.
In the Asia-Pacific region, virtual-only meetings are not allowed in jurisdictions such as Hong Kong, though hybrid meetings are on the rise. In Australia, most company AGMs take place in October and November and it’s likely many will offer a hybrid meeting. With a sophisticated retirement savings system, this market has a large number of retail shareholders, who value having a cup of tea with the board at the annual meeting.
International shareholder relations recommence AGMs and shareholder meetings aside, IR executives are back meeting existing and potential investors in person, or planning to do so in the near future.
Friederike Edelmann, vice president of IR at California-based Central Garden & Pet, says that while the essence of good investor relations remains the same as ever, Covid pushing all meetings to virtual has made it easier to connect with shareholders and potential investors, in particular outside the traditional financial money centers.
‘We still have to communicate in a timely and transparent way, present our vision and strategy, publish our financial results and give guidance,’ she explains. ‘But it’s become a lot more convenient for senior managers to talk to investors because they don’t have to spend whole days traveling. We can often fit in multiple meetings a day with investors in different locations and the schedule is much more flexible.’
Nevertheless, Edelmann agrees that there’s a lot of value in face-to-face meetings. ‘It’s not as easy to get to know people when you’re only meeting online,’ she points out.
Her remit is to broaden the investor base not just in the US but also in Europe. A large share of the European population owns pets and considers them beloved members of the family whose well-being is viewed as an essential household budget item. Hence there is huge demand for pet products, with Germany and the UK each accounting for about 5 percent of the global pet supplies market.
‘We have several significant European investors and, while we talk to them on a regular basis, it will be good to finally meet in person, though we’re still monitoring the Covid situation regarding whether investors are actually in the office,’ Edelmann says. ‘It’s still a bit fluid in the UK and Germany.’
While she will work with a broker to organize meetings, Edelmann says she will do much of the work herself. To this end, software developer Scalens’ co-CEO and founder Guillaume Moinet says listed companies are increasingly managing their own IR programs. ‘The role and importance of corporate broking has dramatically changed in the past few years in the wake of Mifid II regulation,’ he says.
The business, which until recently was known as Praexo, provides benchmarking and data analysis tools for listed businesses. Moinet says listed businesses are increasingly using digital tools to collect investor feedback and target shareholders.
Jennifer Como, Visa
Many of our US clients found online AGMs created opportunities to engage investors more effectively
The positives of Covid Visa’s San Francisco-based IR lead Jennifer Como, alongside CEO Al Kelly, attended their first in-person conferences and meetings in March. ‘It was exciting and wonderful to see investors face to face,’ Como says. ‘We’re navigating the return to in-person meetings in a respectful and flexible manner; it is likely to be a hybrid approach for some time.
‘But I’m back traveling from the US West Coast to East Coast to see investors, and we’re starting to do non-deal roadshows to meet global investors in their offices.’
Como says for the Visa IR team, one of the pandemic’s best outcomes was the ability to virtually attend more conferences and meetings. The IR team could also offer up a broader range of executives to attend investor meetings, given the online format meant location and travel were no longer limiting who could take part in meetings.
‘Our view is that many of these changes are here to stay,’ Como says. ‘Even as people return to their offices and in-person events, there has been a fundamental shift in the way companies communicate and the amount of flexibility audiences expect. We expect hybrid options to continue, which will help broaden our reach.’
Victoria Hyde-Dunn, Informatica
Informatica’s vice president of IR Victoria Hyde-Dunn, based in San Francisco, says the cloud data management business is back attending in-person meetings and events around the US. ‘We’re picking up where we left off in early 2020 and pressing the flesh again, developing those great personal connections and being able to see body language that was missing during Zoom calls,’ she says. ‘Many of the sell-side and buy-side firms are meeting with company management teams for the first time with a warm handshake, especially recent IPOs like us.
‘There’s pent-up demand to meet management teams. We have attended two in-person tech conferences so far this year and it feels like a college reunion. Attendance levels are not yet back to normal, but it’s still great to see everyone. Investors based in London also want to see us, but that takes at least a month in planning and depends on travel restrictions.’
Hyde-Dunn agrees that while in-person meetings are back, hybrid meetings are here to stay. ‘We are no longer confined to targeting one city and time zone and can spread engagements across multiple days and platforms, showcasing the management team’s breadth and depth,’ she notes.
We are no longer confined to targeting one city and time zone and can spread engagements across multiple days and platforms
Asia-Pacific pulse Hong Nam Yeoh, executive director of IR for Singapore’s DBS Bank, says he sees signs of a return to a more normal IR program for companies in Singapore, albeit more slowly than markets in the northern hemisphere. This is because Singapore has adopted a phased approach to gradually reopen its borders to international travel over the past few months.
‘We’re still planning our post-pandemic IR program,’ Yeoh says. ‘Most of our meetings and conferences are still virtual, which makes it much easier for US and UK investors to attend, whereas previously it was much more difficult for them to get here.’
He says the structure of meetings has become less formal now they are mostly virtual: ‘We used to run a full schedule of meetings, which would take hours. But now anyone can attend at any time, which is so convenient.’
As a result, the bank has had inquiries from a greater number of new shareholders than normal over the past few years. ‘It has become much easier for new shareholders to talk to us,’ notes Yeoh. ‘Plus, we’re approaching physical meetings in a different way. Meeting in person is more casual and more about the relationship, whereas online meetings are more an opportunity to explain strategy and talk numbers.
‘When you’re meeting in person, there’s often a lot of information to pack into 45 minutes. Sharing information beforehand helps to get the most out of face-to-face meetings.’
In terms of meeting content, Yeoh says investors have become more interested in ESG themes during the pandemic. ‘Governance is absolutely critical for a bank, so that’s a given,’ he says. ‘But as a financial institution, we’re a fulcrum point in the economy in terms of environmental impacts because we channel capital and make decisions around the allocation of capital, so the focus on E has really stepped up.
‘Having said that, my general observation is that investors are still trying to work out how they should take it into account, although they agree it’s very important.’
When you’re meeting in person, there’s often a lot of information to pack into 45 minutes
Looking to the future While virtual meetings are here to stay, other aspects of many companies’ IR programs have shifted to accommodate the pandemic, as well as current market conditions.
At Informatica, Hyde-Dunn says the focus of the IR program is on increasing engagement with the market, especially given recent volatility in capital markets.
‘Our program is all about being transparent with our business results and building credibility with the street, which takes time given that we are a recent IPO,’ she explains. ‘We’re also leveraging current and prior relationships with the sell side and buy side, investment bankers and corporate access teams to ensure we get invited to conferences, non-deal roadshows and bus tours.
‘We do this with or without sell-side analyst coverage so we can create opportunities to meet with current and prospective investors. There’s been no reset or time to rest; it’s been quite the opposite, having to amplify investor outreach given market volatility and the choices portfolio managers have to make day in, day out.’
Yeoh expects a bottleneck of meetings as the Singaporean investor and company communities return to in-person meetings. ‘We don’t immediately expect to go back to meetings with an unlimited number of people attending,’ he says. ‘We have made the virtual format work: it’s very convenient for a lot of people and means overseas investors can take part in meetings.’
At Visa, the IR team is embedding a new approach to disclosure that emerged during the pandemic. ‘We really stepped up disclosures during the pandemic,’ says Como, who was appointed to her current role in February. ‘We initiated an 8K with mid-quarter operational performance metrics that provided a way for investors to gain a better understanding of the evolving and dynamic situation.
‘While some companies have stopped more frequent disclosures, we have made a deliberate commitment to continue that through this year. Investors tell us they appreciate the extra disclosure, which has helped to manage some of the potential unknowns that could have impacted the stock.
‘As head of IR, my primary goal is to continue to promote a full and fair valuation through sound disclosure and meaningful engagement with investors. Internally, I am focused on working smarter and building efficiencies through workflows and controls. With more than two decades of experience across IR, corporate finance, communication and strategy, I have learned the key to being a successful IR professional is to comprehensively understand the business and the industry.’
Como’s also going to continue a community relations program spearheaded during the pandemic.
‘One of my favorite activities I started last year and did again this year is engaging with a local all-girls school in New York, during the pupils’ finance week intensive,’ she says.
‘These are high school juniors who have already identified finance as a career. It is inspiring to interact with these young women and reminds me we are so fortunate as IR professionals to have a career that is demanding, dynamic and rewarding.’
Given they are a relatively new format, it’s important that IR professionals work out how to make the most of virtual meetings, taking into account their company structure and investor base. ‘AGM material such as presentations, annual financial and directors’ reports, as well as information on director elections, remuneration and proposal adoption can easily transition to digital formats,’ says Computershare’s global CEO for issuer services Naz Sarkar. ‘IROs can make this material available to all shareholders before, during and after any meeting.’
He recommends that IROs distribute electronic information on specific topics of interest to shareholders during the Q&A discussion and immediately after the meeting. ‘They may wish to consider a live ‘submit a question’ feature for online or hybrid meetings,’ he suggests. ‘Ensure attendees understand they can ask the company to withhold their name when they ask questions. Shareholders may be more likely to ask questions if they know this.’
One major benefit of an online AGM is the ability to pre-record the presentations and provide a live Q&A on the day. ’It’s also an opportunity to electronically collect additional data on shareholders attending,’ Sarkar points out.
To make the most of the online format, he recommends companies provide clear guidance on how shareholders and other corporate representatives can attend online meetings.
‘In instances where a shareholder or proxy/corporate representative for the shareholder wishes to attend the meeting, it is important companies are clear on the deadline for submitting supporting information to avoid disappointment on the day,’ he says. ‘It is good practice to host a dedicated AGM page on the company website with all the information shareholders may need, including a way to obtain technical support. Companies should also create contingencies so they can change their plans quickly, if necessary.’
