A look at IRO aspirations and other IR trends

 

Photo courtesy of Michael Covel

Photo courtesy of Michael Covel

Rob Swystun, Pristine Advisers

The acronym that most IROs eventually want to adopt is CFO, according to a new survey on investor relations trends.

Of the 85 IROs who said they see their investor relations role as a transitional one, 32% aim to become a chief financial officer at some point in their career. The survey, performed by the National Investor Relations Institute (NIRI) and executive headhunting firm Korn Ferry International, also found:

  • 27% hope to have an unspecified role in corporate finance.
  • 20% are interested in being chief strategy officer;
  • 12% would like to be chief communications officer; and
  • 6% aspire to be a chief executive officer or president.

As reported by David Katz at CFO Magazine, the sample size for the survey was 790 IR professionals. And out of that, 55% report to the CFO, which is five percent more than in 2012. Another 20% report to the CEO or president, 20% report to the head of IR and nearly 10% report to multiple people within their companies.

The number of IROs with experience in major corporate finance has seen a major drop off over the last 15 years. Back in 1999, 49% of IROs had major corporate finance experience, 24% had corporate communications and public relations experience; and 21% had corporate marketing or sales experience.

In contrast, the 2014 survey sees just 24% of IROs reporting a background in corporate finance, 15% in corporate communications and PR and 14% with a securities analysis background.

IRO-CFO graph

In 2014, IROs said they spent about 59% of their time talking with investors while CFOs spent about 19% of their time doing so and CEOs spent 14% of their time talking with investors.

Other IR trends

To round out this blog post, some numbers from a different survey. This one comes from BNY Mellon, an investment management and services company. Last year the company conducted its ninth annual Global Trends in Investor Relations survey, which saw almost 700 companies from 63 countries of various market capitalization sizes and industries participate.

These numbers are what Business Wire’s Farah Merchant found most interesting about this particular survey.

  • Only 27% of quoted companies globally are using social media to communicate with investors, with 61% citing “lack of investor demand” as the main reason they did not adopt it; 37% saying they saw no value in it and 33% saying they had insufficient resources.
    • Western Europe was the lone region that showed an increase in social media use as an IR tool, where 45% of companies reported using social media, an increase from 32% the previous year. The developed parts of Asia were the most reluctant regions.
    • Twitter, StockTwits, Mobile Apps and Facebook were the most common social media platforms used. LinkedIn and YouTube have continued to decline in the past few years.
  • Online sources of financial media are overtaking the old boys of printed financial media, with more than 84% of respondents citing Bloomberg and Reuters as the most influential financial media outlets. That’s an increase from 58% in 2012. Just 52% declared the Financial Times and the Wall Street Journal to have the most influence on investors. Investor-generated media, like Seeking Alpha and Motley Fool surged from 5% to 15% from 2012 to 2013.
  • Nearly two-thirds of Western European companies surveyed said their top goal in 2013 was to diversify their shareholder base internationally. Companies in the Emerging Asia and Middle East regions shared that goal.
  • Conversely, more than one third of the surveyed companies said they do not distribute financial result press releases internationally and few investor meetings and conferences were held outside home markets.

That’s just a quick snapshot of trends with both IR professionals and in the IR industry. It’s interesting to see how things change in an industry over a big chunk of time and we can always use that information to try and predict future trends within the industry.

What trends do you predict in the future of IR?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s