IR Monitor – 15 October 2025

In this week’s newsletter:

• How to prepare for and respond to activism: FTI’s very own Garrett Muzikowski gave some of the answers in a webinar organised by the IR Society last week
• The Times on why UK-listed companies are flocking to the US ‘pink sheet’ exchange
• The most dangerous corner of a balance sheet and it’s not debt: with limited visibility, receivables can be explosive warns The Economist
• Reuters: JPMorgan’s Dimon backs easing of quarterly earnings requirement
• Paying off angry investors is becoming a profitable trade, suggests the Financial Times: “it is cheaper to purchase forgiveness instead of permission”
• And finally … when shareholder engagement hurts more than it helps. According to the Harvard Business Review, sometimes less is more

This week’s news

How to prepare for and respond to activism – IR Society Webinar

In this IR Society webinar, IR experts spoke on emerging trends in shareholder activism, how activism might be reframed, and how companies can effectively prepare for and respond to such activity. With an increase in activity over the past year, board seats in dispute & greater attention paid to the UK’s undervalued market, FTSE 250 CEOs should pay attention. Leaders should also reframe attitudes towards activism, treating engagement as an opportunity to collaborate and have a dialogue during the decision-making process; rather than a disruptive nuisance, perhaps activists should be seen as the antidote to increasingly passive traditional investors. FTI’s own Garrett Muzikowski outlined a “defence plan” against activism that every IR department should know, beginning with recognising one’s own vulnerabilities and preparing a counter-narrative. The uniting theme of the session was that activists have more in common with boardrooms than might initially seem: they all want to see the company succeed. So listen to what an activist says, but don’t feel pressured to bend to every command.

Why UK-listed companies are flocking to the US ‘pink sheet’ exchange

A growing number of UK-listed companies are turning to the US-based OTC Markets exchange as persistent valuation discounts in the UK continue to pose challenges. OTC Markets, formerly known as the Pink Sheets, is an electronic, over-the-counter (OTC) dealer-based marketplace that enables trading in securities not listed on major exchanges. According to The Times, over 75% of FTSE 100 companies, and a similar share of the FTSE 250, are now trading on the platform. Trading has accelerated in the past year, with UK stock trading volumes on OTC Markets increasing 71% year-on-year, reaching $56 billion in the first three quarters of the year. Blue chip names including LSEG, Reckitt Benckiser and Pinewood Technologies are among the latest to join. Jason Paltrowitz, Executive Vice President at OTC Markets, highlighted that ongoing valuation discounts in the UK are attracting US investors seeking diversification beyond tech-heavy exchanges.

The most dangerous corner of a balance sheet – The Economist

Auto parts company First Brands’ collapse follows a long legacy of companies’ strained histories with their receivables, The Economist highlights. Receivables, as a form of credit, have been used to exaggerate revenue reporting and contribute to opaque accounting in times of distress. Notoriously difficult to audit, such practices sustained and subsequently brought down the likes of Carillion, Sunbeam, Enron, and are now being investigated as the cause of First Brands’ $2 billion hole. The Economist predicts that the next receivables-induced collapse is lurking in China’s rapid infrastructure expansion. On the flip side, credit sustains the economy as we know it and cannot be vilified any more than capitalism itself can be. Most of the time, accounts receivables are unremarkable and habitual, but they warrant raised suspicions when they are mismanaged and exploited.

JPMorgan’s Dimon backs easing of quarterly earnings requirement

JPMorgan Chase CEO Jamie Dimon has expressed support for easing U.S. quarterly earnings reporting requirements, arguing that the pressure to meet forecasts often drives poor decision-making. Reuters reports that Dimon has backed proposals to allow semi-annual reporting, a change first endorsed by President Trump in 2018 and now under review by the SEC. Dimon noted that JP would continue providing quarterly updates, but with “much less stuff”. Dimon, a frequent critic of regulations that hinder public companies, said the shift could help foster better corporate governance and reduce the pressure of short-term performance metrics on strategy.

Paying off angry investors is becoming a profitable trade

A nifty loophole for fast-moving deals, or a signal of democratic erosion in boardrooms? asks FT Lex, noting the uptick in settlements of merger-related litigations between companies and their shareholders. These settlements reflect a recognition by listed companies and their lawyers that it is cheaper in the long-term to pay off agitated shareholders who feel spurned by mergers than it is to abide by investors’ wishes and raise the purchase price. Dell’s 2018 acquisition of VMware is a prime example, where shareholders such as Elliott Management expressed discontent with the price. The resulting lawsuit settlement cost $1 billion while Dell subsequently achieved a sixfold share price increase. But is this a good precedent? Inattentive boardrooms can hijack this “purchase forgiveness” model to gradually increase the distance between them and their shareholders, shielding them from the decision-making process.

And finally… when shareholder engagement hurts more than it helps

As shareholder ownership becomes more diverse and dispersed, leaders often default to more and more shareholder engagement. The logic seems sound: more engagement should mean better alignment. But research by the  Harvard Business Review questions the effectiveness of this approach. A study of shareholder roles in multigenerational family firms in France finds that over-involvement can actually slow down decisions and increase friction. Instead of maximizing participation, the Review argues, companies should focus on “shareholder supportiveness,” built through intentional practices that foster a sense of shared purpose and long-term stewardship. Shareholder involvement in daily operations isn’t necessary so long as they are aligned on what matters most and as long as they are offered stability and commitment during key moments. Ultimately, effective ownership isn’t about constant engagement: it’s about cultivating shareholders who may speak less often, but show up when it counts—adding value not through volume, but through trust and timely alignment.