Financial Communications

IR Monitor – 12th January 2022

Investor Relations News

Happy New Year. We start off this first edition for 2022 with news that the investor relations market is in a hiring frenzy. Next, we look at how the role of a CFO in IR is changing. Then, we ask about the equality of shareholders big and small. After that, we look at how the London stock market can shake off what some say is a Jurassic image. We also explore how the acronym ESG could be dissolving soon. And finally, we look at the arrival of ‘bividends’.

This week’s news

How to navigate the IR hiring frenzy

In the last year, the IR market has seen three times as many job announcements as normal. With companies reassessing their needs amid the Covid-19 pandemic and IPOs surging, the investor relations market is experiencing a hiring ‘frenzy.’ For companies, there are ways to navigate the frenzy without being swept up in rash hiring decisions. For job-seeking candidates, there is a need to invest time in thinking about who they are, their strengths, and where they want to go in their careers. In an interview with IR Magazine, executive IR search consultant Smooch Repovich Reynolds suggests that we will see the fallout from this frenzy in one to two years as the cracks in frantic hiring decisions start to show. Both candidates and companies need to have a clear line of sight about what is important to them to effectively navigate this dynamic jobs market.

CFOs must play a key role in managing investor relations

Financial Director has reported that the responsibilities of CFOs are changing as major economic disruptions become the norm for the foreseeable future. CFOs will be key to balancing the short and long-term needs of stakeholders. The pandemic has emphasised the need for CFOs to give investors a clear account of operations and financials. This includes updating investors on their company’s liquidity position and its ability to withstand a downturn, as well as measures being taken to safeguard employees, vendors and suppliers.

Are all shareholders equal?

If each share carries a single vote in company meetings and has the same rights as any other, then in theory all shares are equal. However, those who own more shares than others own larger proportions of the company and have more votes, so might be expected to have more influence. The Investors’ Chronicle has highlighted the power discrepancy between small and large shareholders. It is objected that companies hold capital markets days for institutional investors while smaller investors are not invited and the suspicion is that these provide the institutions access to information not available to others. However, it is the job of the IR manager to make this sure doesn’t happen, as the IC points out. Moreover, straightforward diary pressure should not be under-estimated as a factor which favours the prioritisation of bigger over smaller investors.

Can the London stock market shake off the dinosaur image?

The London stock market has been criticised as a dinosaur with a dated list of blue-chip companies in the FTSE 100 and tech companies making up no more than 2% of the index. There are signs, however, that London is changing with the flotations of some fast-growing companies in 2021 such as Oxford Nanopore and Darktrace. All the same, the Guardian has suggested that London needs to move ‘faster and harder still’ to lure growth companies, close the gap with New York and become a more attractive place to list and raise capital. To attract and retain fast-growing companies, mindsets must focus on market share rather than profitability and allocation to technology stocks should increase. London’s status as a global financial centre could brighten in 2022.

Acronymic breakup 

Like many sprawling conglomerates, the ESG acronym has served its historic purpose and could be set to split. Initially, the acronym was a handy way for do-gooders to push the investor community to invest in solving communal problems they ignored in pursuit of the bottom line. This has arguably worked and, today, $17 trillion of U.S. assets under management are dedicated to ESG-related strategies. However E, S and G are not natural bedfellows; moreover, aggregating their measurement allows executives to mask underperformance in one domain with outperformance in another. BreakingViews has suggested that it is time to give the E, the S, and the G their own independence

And finally … Bividend!

BTCS Inc, a blockchain tech-focused company, has announced the first ever dividend payable in Bitcoin by a Nasdaq listed company, known as a ‘bividend’. At 5 cents a share, payable in dollars, bividends are set to test the boundaries between cryptocurrencies and traditional financial systems. Is this a step towards crypto dividends? Bloomberg has suggested so, with more to come.

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The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.

©2022 FTI Consulting, Inc. All rights reserved. www.fticonsulting.com

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