IR Monitor – 25 June 2025

In this week’s newsletter:

• Aflac cyber-attack: a case study in how better incident management can bolster investor confidence
• The FT explains why the serial CEO has fallen out of fashion: increasing shareholder pressure is one factor 
• Assess vulnerabilities before short-sellers attack: some advice from FTI’s Bryan Armstrong
• ‘Earnings are our Super Bowl halftime show’: tales from IR Magazine
• Who are the world’s best investors? The answer is companies themselves, according to the Economist
• And finally … Companies! Make sure your analysts have returned to the office instead of working from home

This week’s news

A case study in how better incident management can bolster investor confidence

Aflac recently disclosed a cyberattack on its US systems that involved unauthorised access by a sophisticated threat actor. Despite the potential exposure of personal data, the company acted swiftly, containing the breach and reassuring stakeholders. Finimize reported that markets responded with relative composure as Aflac’s shares remained stable. Despite the potential threat, investor confidence was bolstered by the insurer’s handling of the situation. This example serves as an important reminder that when incidents hit, swift responses and clear communication are the key to protecting company value. As cybersecurity threats continue to rise, companies that can respond quickly are likely to experience minimal impact on their share performance, even amid volatile economic conditions.

Why the serial CEO has fallen out of fashion

The high-pressure corporate environment of today, intensified by greater public scrutiny and stakeholder expectations, means many CEO’s are stepping aside after a singular run at the top job. Whereas in the past, top corporate players took pride in leading a portfolio of companies, almost a third of departing chief executives in 2024 decided to retire from executive roles entirely. According to the Financial Times, the average tenure for CEOs is trending downward and a notable portion of CEOs who exited last year had held the role for less than three years, highlighting a shift toward shorter, more intense leadership stints at the top. Today’s leaders also face a host of new pressures: navigating AI-driven transformation, responding to activist shareholders, managing heightened political sensitivities within workplaces, and operating under constant public scrutiny. The result: more CEOs are turning towards a “portfolio” career of boardroom advisory, private equity seats and philanthropy. 

Assess vulnerabilities before short-sellers attack

In a recent article in The Deal, FTI’s Senior Managing Director Bryan Armstrong shared insights into how companies can assess and respond to the threat of short seller attacks. Armstrong noted that a recent analysis by FTI found no direct correlation between high short interest and an increased risk of a short seller attack. In fact, the relationship appears almost opposite, companies with higher short interest are actually less likely to be targeted. Based on this, Armstrong advised that when assessing vulnerabilities, companies should adopt a contrarian viewpoint, critically examining their story from the perspective of sceptics or the “bear case.” He also emphasised that a company’s response to a short seller should be tailored to the credibility of the activist involved. While established short sellers generally merit a formal and measured response, engaging with smaller or lesser-known activists could unintentionally elevate their profile and draw more attention to their campaign.

‘Earnings are our Super Bowl halftime show’

With over 100 earnings calls under her belt Mary Winn Pilkington, Head of IR and PR at Tractor Supply has had her fair share of IR experience and she recently spoke to the IR Magazine about preparation, strategy and staying calm calm under pressure. From crashed platforms to misprinted dial-in numbers, Pilkington’s seen it all and handled it with professionalism. Her advice is to work the calendar, stay ahead and never lose sight of the long-term plan. While new technology can help sharpen scripts and analyse sentiment, she champions the power of personal tone and connection to ensure it feels aligned with the investment story. Pilkington notes that for her IR isn’t just about reporting results it’s about building trust, connection, supporting strategy and driving value. Her comparison of earnings to Super Bowl will ring true to many of the readers.

Who are the world’s best investors? The answer is companies themselves

The Economist notes that, in theory, arbitrage should keep market prices aligned with fundamentals, as savvy investors correct mispricings. In practice, markets stray, driven by sentiment or mechanical flows. Recent research suggests that corporates themselves could be the market’s most effective arbitrageurs. Far from passive capital-raisers, firms time the market better than professional investors. Evidence shows that firms issue or buy back shares in ways that predict future returns, outperforming banks, hedge funds, and mutual funds. This is partly due to insider knowledge of their own cash flows but also, firms can issue overpriced equity, switching between debt and equity financing and providing liquidity when passive flows create distortions. As asset managers become increasingly passive or constrained, it is corporates, with their flexibility and resilience, that help keep markets in check.

And finally… Companies! Make sure your analysts have returned to the office instead of working from home

The long-running debate over WFH versus office has found clear evidence in the case of sell-side research analysts, whose forecast accuracy is both public and measurable making them of interest to academic researchers. According to Bloomberg, a recent study, “The Impact of Return-to-Office Mandates on Equity Analysts” found that RTO mandates improve forecast accuracy by around 15%. The benefits were greatest for younger, less experienced analysts, who likely gained from in-person mentoring. Female analysts also saw larger gains, possibly due to fewer domestic distractions at the office, and the impact was strongest for the initial post earnings forecasts which have a shorter, time-pressured turn-around. Interestingly, the “RTO effects concentrate on stocks that are less important to analysts’ careers (e.g., those with smaller market capitalization, lower trading volume, or lower institutional ownership).”