Five insights into IR responsibilities and outsourcing

Sep 25, 2014
<p>New report from <em>IR Magazine</em> takes in-depth look at IR tasks and third-party support</p>

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No two IR departments are exactly the same. Within each company, IR has a unique team structure and set of responsibilities defined by the needs of that particular enterprise. Saying that, there are some areas most IR teams have responsibility for, like organizing investor meetings, IR strategy and conference calls/webcasting.

Indeed, these three areas are where IR departments are most likely to have primary responsibility, according to the findings of a new study we released last week. The study ‒ based on survey responses from close to 900 IROs ‒ takes an in-depth look at IR responsibilities and use of service providers, analyzing the results by both market cap and region.

Below, I’ve pulled out five findings that jumped out at me as I was reading through:

1. Along with asking what primary responsibilities IROs have, we also asked about secondary responsibilities, where IR offers input but doesn’t make the final decisions. From the findings we can see that sustainability reporting and social media monitoring are important secondary tasks for IR teams, mentioned by 47 percent and 35 percent of respondents, respectively.

2. By comparing responses on responsibilities and outsourcing, it’s possible to see which key IR tasks are most likely to be passed on to third parties. The three areas with the highest levels of primary responsibility and outsourcing are conference calls/webcasts, perception studies and shareholder ID.

3. Where would IR teams like to spend money? If resources allowed, the most popular service departments would sign up for is perception studies (mentioned by 36 percent). Notably, this is already a popular outsourcing area with 27 percent of respondents currently paying a third party to conduct market surveys. Clearly, outsourced perception studies are viewed as highly valuable.

4. Outsourcing levels tend to rise as company size increases. Within this trend, the area most affected is shareholder ID/register analysis; 25 percent of small caps use third parties for this service while the figure for mega-caps is 48 percent.

5. We asked respondents to rate how satisfied they are with three broad service areas: reporting, market intelligence and outreach. The overall scores are on the low end of positive (6.4 for reporting, 6.3 for market intelligence and 6.1 for outreach) showing that while IR departments aren’t dissatisfied with the services they receive, they do feel there is plenty of room for improvement.

We’ll be sharing some more findings from the report over the coming weeks on our website. Click here to find out more about the IR responsibilities and outsourcing report, which is available to download for premium subscribers to IR Magazine.

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