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Jan 24, 2023

Key metrics for IR evaluation at mega and mid-cap firms

Shareholder opinion tops charts at larger companies but plummets at small caps

The latest IR Benchmarking 2023 report by IR Magazine finds that nine in 10 mega-cap IROS leverage feedback from their shareholders to assess the performance of in-house IR programs. Similarly, 85 percent of mid-cap IROs consider this a key metric in their IR evaluation process.

Looking at how IROs at mega, large and mid-cap businesses get that view from the investment community, the report suggests this is mostly through informal discussions with investors or brokers.

The research also suggests that as company sizes increases, so does the importance of feedback in general. Data shows that 83 percent of IROs at mega-cap companies turn to senior management and the board for internal feedback on their program. The same metric is also highly rated by IROs at mid-cap companies.

Data on small-cap firms paints a different picture. A significantly lower 56 percent of IROs take into account executives’ input to evaluate the success of IR. What IROs at small-cap companies care most about is the composition of their shareholder base. The importance of this metric drops as company size increases.

What Covid-19 didn’t change

It’s widely accepted that Covid-19 has changed the way IROs operate. If anything, many believe, it has proved once more how good IR is more important in tough times than in good.

One question remains, however: has the pandemic changed the view senior management has of IR? 

IR Magazine’s research suggests that, globally, 73 percent of IROs have seen no change in senior management’s attitude to investor relations. When considering each of the regions studied, data reveals regional fluctuations. For example, less than 20 percent of European companies believe senior managers view IR differently after Covid-19, but nearly 50 percent of IROs at Asian companies believe the pandemic brought big changes in this space. In North America, only 25 percent of IROs surveyed believe executive views of IR have changed over the last few years.

The research also notes that there are small variations in views according to company size. While a quarter of small-cap respondents and just over a quarter of mega-cap IROs see a post-pandemic shift in senior management’s attitude to IR, this figure rises to 28 percent of large-cap IROs and three in 10 mid-cap IROs.

IR Magazine’s IR Benchmarking 2023 report is available to subscribers. If you are not yet a subscriber, you can view a sample of the report here: 

Click to read Sample: IR Benchmarking research report

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