Recap: IR Magazine Think Tank – Europe 2020
With many IR events becoming online only for the first time this year, it was inevitable that IR Magazine’s Europe Think Tank would be a virtual affair, too.
The trend of in-person events disappearing from corporate calendars was one of the few certainties we took into the day’s discussions, which aimed to replicate the intimate setting our think tanks usually create via an online platform.
A packed schedule of panel discussions, smaller roundtable chats and networking thanks to a quickfire ‘speed-dating’ service, which put attendees into conversation with a random colleague for a short time, meant much of that social buzz was retained.
The questions that defined the day were those that IR teams – and the capital markets as a whole – have been grappling with for a few months now: how has the Covid-19 pandemic shaped the investment landscape? How can companies best respond right now? And what permanent changes will the crisis make to fundamental working practices?
For the first speaker of the day, Madeleine Szeluch, head of IR at the UK government’s Department for Business, Energy and Industrial Strategy, it was still ‘too early to tell exactly what will happen’ due to the ripples the crisis would cause ‘under the surface’.
From Szeluch’s seat, however, more market intervention from regulators to ensure a steady recovery was all but certain. She also said ‘agile governance’ would be a trend as the market continued to react flexibly to the pandemic, the global bull market would end and there would be an inevitable and increased focus on ESG factors, both by corporates and investors.
These threads would crop up throughout the day’s discussions, with the morning dedicated to the parts of IROs’ work that were rapidly taking a turn toward digital. First, three panelists explored how to manage roadshows and corporate access in the virtual world, where personal introductions and building rapport were suddenly a different beast.
Sergio Gámez Martínez, global head of shareholder and investor relations at Banco Santander, described it as a ‘game changer for the profession’ and one that had inspired him to work more efficiently, thanks to a vastly reduced amount of time spent on flights and other logistical undertakings.
At the same time, particularly given market volatility, it was important to keep relationships as strong as possible. ‘We need to make sure the sell side and the buy-side community feel, if anything, closer to each other than before,’ Martínez explained.
In fact, Hugo Sanders, managing director and director of corporate access and research services at Wellington Management, said he had observed the firm’s engagement with companies increasing since the pandemic hit, while Martin Railton, head of advisory EMEA at IHS Markit, said brokers were increasingly being excluded from the conversation in favor of more direct links.
Several methods for achieving meaningful connections with the buy side were explored in the following session, which considered digital IR strategies. Charles Chalky, IR manager at UK recruiter Hays, spoke about leveraging a single asset – in this case, an animated video – across multiple channels to ‘best use four or five minutes of investors’ or analysts’ time to introduce them to the business’.
Hanna-Maria Heikkinen, head of investor relations at Finnish shipping technology firm Cargotec, turned the firm’s IR blog into a series of Covid-19-related questions and answers and started a podcast targeting private investors. Both panelists highlighted the importance of consistency of message, making content that was numbers-light and therefore ‘evergreen’, and collaborating with other corporate teams.
The theme of transparency carried over into the afternoon’s sessions, the first of which examined how views on ESG would be shaped through 2020 and beyond, with Amit Bhalla, head of investor relations at Schneider Electric, summarizing it well. ‘The coronavirus situation has probably made us all a bit more mindful about the susceptibility of society and how things can change,’ he noted, adding that issues like climate change would no doubt be higher on the agenda in future.
On the investor side, the pandemic has highlighted many themes related to how technology and human rights overlap, said Daniëlle Essink, engagement specialist at Robeco, and these may become a staging ground for engagement in the future.
Camilla Ayling, equity analyst at Legal & General Investment Management, agreed, adding that as investors increasingly collaborate to bring these issues to the fore, IR teams should consider sharing best practices in the ESG space.
The investors quizzed in a live Q&A at the end of the day held similar perspectives. Dr Sebastian Raedler, head of European equity strategy at BofA Securities, walked the audience through some of the conclusions drawn via the bank’s analytical framework, namely some signals that economic recovery was just around the corner.
Heinrich Ey, co-CIO for German and European mid/small caps at Allianz Global Investors, said challenges for investors will come from matching ESG pressures against the larger, macroeconomic challenges.
He also noted that companies need to report on ‘clear strategies and actions that will be measured’ and use any time gained through changes to working practices to link up with the right investors on the most pertinent issues.
All the panelists agreed that staying abreast of this would require significant effort from IR professionals: while Raedler and Ey advised IROs to keep informed of the macro setting and the frameworks investors were using, Mark Troman, managing director and deputy head of EMEA equity research at BofA Securities, said it was also important to refocus on your company’s inner workings as information demands became more complex.
‘Think about changing the quality and quantity of communication, both in terms of what you absorb internally and how you distribute that to your investor client base,’ he advised.