The changing face of IR: Digitization, regulation and globalization
As part of IR Magazine’s 30th anniversary celebrations, Andrew Holt talks to Achim Weick, founder and CEO of EQS Group, a leading international provider of technology for investor relations, on how the IR industry has developed during his career.
What has been the biggest change in IR during the course of your career?
Like in other industries, digitization has been the biggest change of the last two decades. When I founded EQS Group in 2000, the internet was in its early stages and IROs were asking me why they should be using this new medium to communicate with investors. Today, pretty much every IRO knows the capabilities of the internet to reach investors. But this also results in increased expectations from investors. Overall, I see this transition in digitization as a very positive change that has massively increased market transparency.
What have been the most negatives changes you have seen in IR?
Some companies focus too much on optimizing cost structures in IR and see IR departments more as cost centers. Generating value by attracting new long-term investors or increasing liquidity is not the main approach at these companies, which can be a negative.
What advice would you give someone coming into IR today?
Always put yourself in the shoes of your CEO, CFO and your investors. By doing so, you can generate trust in IR. That’s my purpose when working in this industry, and the impact this approach brings makes the job so fascinating.
How has technology changed IR as a job? Has this been for better or worse?
As I mentioned, technology offers IR so many possibilities. Today, almost all investor communications are digital and, with this, you can really increase value for investors. But technology has also led to a flood of communications in the industry every day. For IROs and communications teams, it’s a challenge to stand out from the competition, to tell your equity story to your current and potential investors, and to be efficient with your communications activities.
From our experience as a provider of digital technology, we know technology can make IR jobs better. The question we always face is how we make the work of IROs better and easier. In the last two years, we have asked ourselves this question every day when developing our new EQS COCKPIT, a digital platform that combines all IR workflow and regulatory requirements, which we will be launching at the end of the year.
What change or changes would you like to see in IR, and why?
As a global market participant and witness to the existing global competition for investors, I would like to see a more global understanding of IR. When I look at the different global markets, I can see that IR is different in each of them. For example, North American IROs often excel in investor targeting, using a more active approach to investors by comparison to European IROs. In Europe, on the other hand, IROs are often more buttoned up in their communications and strive for a more transparent presentation of their company. Both sides can learn from each other.
What do you see as the most important change the IR industry will face in the future, and why?
We see three big trends that are important for the future of IR: digitization, regulation and globalization. The changes occurring due to digitization won’t stop, due to new trends like big data and artificial intelligence. This will increase the efficiency and effectiveness of IR activities.
The increase in regulation we have seen in recent years is also likely to continue, and every team will have to address the question of efficiency in handling all these emerging requirements. But digital technology can help with that. Finally, we see that investors are looking for investments globally – so thinking globally is no longer just an option: it’s an imperative for companies.
What’s the most important advice you have been given in your career, and why?
‘Don’t grow too fast!’ Before I started EQS Group, I ran an IR agency. It was a challenge protecting that business, and there were many ups and downs. In good times you lost your best people, and in bad times your clients. It was very volatile. To minimize our business risks, I relied on this advice and tried not to grow too fast. In my current situation, this has been very helpful advice. Today at EQS, I’m grateful that we are a business that can grow with ease. Cloud software is easy to scale and often deeply embedded in company infrastructures.
How has regulation shaped IR over the years?
The number of regulations has increased dramatically, but the global financial crisis has been a good impetus for this shift. Of course, I understand IR teams that see this influx of regulation as a pain point in their work – especially for smaller teams, where navigating regulations can be a real challenge. Usually, however, the market finds ways of handling these changes. For example, I remember that there was a huge amount of uncertainty in terms of how to deal with the Market Abuse Regulation in Europe. Today, we hear feedback that most companies are handling this regulation confidently.
Has its impact been positive or negative?
Overall, I think regulation helps the market in increasing transparency and trust. For example, with Mifid II, companies need to increasingly take investor targeting into their own hands and be more independent of banks and brokers. In the end, I believe they will learn more about their stakeholders by doing so.
How well has IR Magazine represented the industry over the past 30 years?
IR Magazine is the only global magazine in our industry, and therefore is an important voice for IR, providing a great overview of global trends and many insights on interesting stories and case studies.
For you, what has been the most stand-out article to appear in IR Magazine over the years, and why?
I really enjoy the annual global practice reports. They are very helpful in better understanding the market and its needs. For us, these reports are an important source of information when we develop our solutions.