Study: Reporting to CEO gives IR heads more senior management access
IR heads have greater access to senior management members if they report to the CEO than to the CFO, according to new IR Magazine research.
The IR Function 2019 report looks at the reporting structure of IR and how often IR issues are discussed with senior management and company directors, as well as the issues they face. The report is based on findings from IR Magazine’s Global IR Survey 2018 which polled 1,000 professionals between Q1 and Q3 2018.
‘There is a clear correlation between IR reporting structure and the regularity of meetings with senior management,’ states the report. ‘Not only do IR heads who report directly to the CEO meet more regularly with their chief executive, but they are also more likely to meet regularly with other members of senior management. In fact, IR heads who report to the CEO meet just as regularly with the CFO as IR heads who report directly to the CFO.’
According to the report, 87 percent of those polled say reporting directly to the CEO gives them more contact time with senior management. This falls to 70 percent if IR heads report to the CFO or others in the organization.
Weekly CEO meetings
The report also highlights regional differences in terms of IR teams’ access to senior management. North American IR heads are most likely to regularly liaise with key members of senior management. The report notes that almost four in five (79 percent) meet with their CFO weekly, with 46 percent meeting with their CEO just as frequently. In Europe, 69 percent of those polled say they meet their CFO weekly, with 40 percent meeting with their CEO just as often. Asian companies have the least frequent communication between senior management and IR. Just over one in five Asian IR heads (23 percent) hold weekly meetings with the CEO to discuss IR issues, the report shows.
The report also states that IR heads in Europe are more likely than their North American or Asian counterparts to have regular meetings with the head of communications or corporate secretary.
Cap size differences
There is a notable drop in senior management IR engagement at mega-cap organizations, according to the report, which highlights that just 19 percent of mega-cap IR heads meet with the CEO on a weekly basis to discuss IR, while 58 percent meet weekly with the CFO.
By contrast, nearly three quarters of IR heads at other cap sizes meet weekly with the CEO.
The report adds: ‘Small-cap IR heads are most likely to hold weekly discussions with all members of senior management. There is less of a difference between the cap sizes when looking at senior management IR meetings on an at-least-monthly basis.’