The role of an Investor Relations (IR) professional is more critical than ever amid economic uncertainty, inflationary concerns and a challenging geopolitical environment. The C-suite and Board require IR’s insight around market and investor sentiment as well as outlook and guidance to steer through current and emerging trends. Global capital markets are forecasted to experience extended macro headwinds, and corporates will need to rely on financially-savvy and strategic IR talent to improve the impact and efficiency of their engagement with the markets. Whether you’re an IR professional at an early-stage company navigating these issues for the first time, or at a late-stage company trying to boost investor confidence during a bear market, now’s the time to target new investors, enhance shareholder engagement and improve ESG profiles. These are among several major findings that emerged from Nasdaq’s 4th Annual Global IR Issuer Pulse Survey.
The greatest challenges facing IR professionals include attracting investment capital from the generalist population, breaking into international markets and messaging around guidance and forecasts. That’s why many IR professionals are aggressively focusing their efforts to ensure productive engagement with the right internal and external stakeholders. Thousands of corporates rely on Nasdaq’s Pulse survey to help them better understand what’s happening in the markets, their sector, benchmark to peers, as well as how they can optimize engagement with investors and improve their overall decision-making.
Greatest Challenges for IROs
During periods of heightened volatility, IR professionals across companies of all sizes are laser-focused on finding better ways to communicate with investors to help attract new capital. Small- and micro-cap companies report managing liquidity/volatility constraints among the top three challenges, while mid- to mega-cap companies focus on messaging around guidance/forecasts. Across the board, the most difficult decisions made by both long-tenured and early career IR professionals in the last 12 months were related to guidance and communications with the broader financial community, given the macroeconomic backdrop. To that end, market-facing events resurfaced as a core focus area, as companies grapple with whether to hold hybrid or virtual events and the optimal timing of such efforts.
IR Priorities, Spotlight on ESG
When asked about their top three priorities for 2023, the majority of survey respondents prioritized targeting new investors, enhancing shareholder engagement and improving ESG profiles. Also top-of-mind among companies were investor behaviors and the investment landscape, including increased industry demand for passive and thematic investing. ESG emerged as a major area of focus. As regulatory requirements evolve, investors are providing additional input and corporates are establishing new enterprise sustainability commitments. Several corporates identified ESG as a major theme based on increasing demand for companies to build their programs, narratives and strategies, as well as how they disclose and communicate that back to their investors and the broader stakeholders.
Different Functions of IROs
In addition to their regular duties, IR professionals are often responsible for ESG (35%), corporate communications (16%) and strategy (14%). If given 1 or 2 additional hours in the workday, more than 50% of survey respondents said they would focus on investor targeting/ outreach/ relationship-building and strategy/ planning. Major topics of conversations between IR professionals and the C-Suite and Boards primarily focus on messaging, market sentiment and investor engagement. More than 40% of issuers say that the macroeconomic landscape is the primary focal point for Board-related investor conversations. The Board also had a distinct set of topics on their agenda that include risk management, succession planning and cybersecurity. In terms of management FAQs, hot topics of discussion included competitor news, daily trading and sell-side estimates.
Back to In-Person
The return of in-person events led to an uptick in roadshow activity and conference attendance, while hybrid (in-person and virtual) Investor/Analyst Days are also back in motion. Nearly 60% of survey respondents said they plan to hold an Investor/Analyst Day in a hybrid capacity, with 10% going fully virtual. Nearly half of the respondents highlighted the macro economy as the most common theme when meeting with their investor base, except for micro caps, of which 37% of respondents reported hearing the most about company/sector-specific factors and company financials.
Empowering IR Excellence
The dynamic field of IR calls for collaborative partners who are willing to build upon their existing expertise to lean into market-facing events and meet the evolving demands. Nasdaq’s Global IR Issuer Pulse Survey is based on results from 800+ respondents in multiple countries and across all market caps and sectors. Findings gathered from our survey results help issuers navigate capital markets and tell their best story to drive valuation and elevate their global brand amidst a challenging backdrop.
In today’s ever-changing market landscape, IR professionals should be nimble in their actions and work together with partners to serve the needs of investors and corporates. Join us at the 2023 Nasdaq IR Forum, where we will bring together leading IROs and capital markets participants to discuss the latest trends and challenges that the community is facing.