Direct dialogue between investors and companies continues to grow
In the sixth annual survey by international IR, financial and corporate communications consultancy Citigate Dewe Rogerson, 190 Investor Relations Officers (“IROs”) from 18 countries across Europe explain how they are responding to the evolving corporate access environment and offer their views on the quality of sell-side research, trends in narrative reporting and how technology is transforming the way in which companies engage with the investment community.
Research highlights
- Direct dialogue between investors and companies continues to grow at the expense of the traditional role of investment banks as providers of corporate access and research
- Whilst brokers remain the first port of call when it comes to organising investor roadshows, companies are taking greater control over which investors they see: 44% are planning to determine themselves the majority of their roadshow targets in 2014
- Sell-side research quality continues to decline: 37% of companies state that research quality on their company has worsened over the past 12 months
- Institutional investors are increasingly producing their own in-house research on companies of interest: 42% of companies have noticed an increase in internal buy-side research over the past 12 months
- Despite the growing trend of shareholders seeking greater engagement at board level, nearly a third of chairmen and other board members only see investors at the AGM
- More than a third of European companies have no initiatives to promote female representation on boards, despite regulatory pressure and rising transparency and disclosure requirements regarding board diversity, as well as the widely-recognised benefits of diverse boards for the long-term interests of companies
- Nearly half of European IROs have either none or virtually no engagement with investors on executive remuneration
- The integrated reporting approach is rising in popularity fast as companies attempt to shift reporting dialogue beyond the discussion of short-term earnings by including both financial and other value relevant information in their periodic reports
Commenting in the foreword to the survey, Lord Myners said: “Too often there remains a gap in communications and constructive engagement between a company and its owners. Shareholders need to engage more actively and responsibly, and company boards, executive management and IROs need to strive to bridge the remaining gap and to communicate honestly and effectively.”
A copy of the survey can be accessed here.