What European IROs can glean from their North American counterparts
This article was produced in association with ELITE Connect. It was originally published on the ELITE Connect platform.
The recent CIRI and NIRI annual conferences are two of the largest IR events in the world, bringing together a host of industry leaders and IR experts to explore and discuss issues affecting North America.
Yvette Lokker, CIRI’s president and CEO, observes two main issues that featured heavily at the CIRI 2016 event, both of which have an impact upon the European IR landscape.
The first is the continuing depression of global oil prices and how it is affecting businesses, even if they don’t realize it. ‘The sessions were really interesting. It was clear by the end of them that even companies that thought they weren’t affected had realized they were, to some degree,’ says Lokker. ‘European IROs should take a look at their operations and assess how they are affected by this new reality for oil and gas prices.’
In terms of addressing these challenges, Lokker points to a trend in companies taking a serious look at their operational costs to see where savings can be made. ‘A lot of companies talked about how they were streamlining their operations to optimize their profits in an effort to counteract depressed oil prices,’ she says.
ESG was another hot topic at CIRI, and one that until now hasn’t really been on the Canadian radar. ‘Governance has always been important, but that hasn’t really been the case for the environmental and social aspects until now,’ observes Lokker. ‘Panelists discussed shareholder activism and how ESG data has become a growing consideration for investors that decide to become more active with their issuers.’
For the European IRO, this is undoubtedly a positive. ‘Many European companies have much more developed ESG policies,’ Lokker notes. ‘This presents a real opportunity for those coming over to meet Canadian investors as it appears to be much more of a focus in their dialogue.’
At the NIRI 2016 event, a broad range of topics graced the table, many of them offering insight into the current investor agenda for IROs in Europe.
‘We held a number of sessions of great interest to European IR professionals, across a broad spectrum of issues,’ says NIRI’s interim co-CEO, Matt Brusch. ‘One of the most interesting was a workshop on reputational risk management using real-life crisis training. This is especially timely as global companies such as Volkswagen try to move beyond major scandals that have damaged their reputation both in the US and around the world. It’s something European IROs should consider in the current landscape.’
Mirroring themes from CIRI’s conference, activism also featured heavily on the NIRI agenda, with breakout sessions offering experts who shared their proxy contest war stories. ‘While proxy fights are less common in Europe, European companies shouldn’t assume they are immune from US hedge fund activism,’ says Brusch. ‘We also hosted a much-talked-about breakout session on short attacks ‒ which have become an emerging area for activism ‒ and saw three IROs recount how their companies struggled to fend off damaging bear raids by unscrupulous activists.’
Continuing the crisis management theme, delegates also took part in discussions surrounding cyber-security and how IROs can tackle the challenges posed by cyber-security breaches – another theme applicable to IROs wherever they are based.