IR Monitor – 30 July 2025

In this week’s newsletter:

• NY Times’ DealBook discusses if board members should be licensed
• UK companies face record profit warnings – The Times
• A new era of corporate governance: the quiet power of the Big Three institutional investors – IR Impact
• Bloomberg’s Matt Levine on the big differences between private companies and public companies
• A good time to be in IR? Bloomberg on the flood of “dumb money” into risky companies with little or no profitability
• And finally… the FT asks some questions: If the market is open 24 hours a day… will Tesla start announcing earnings at 11.59pm, ruining the sleep cycles of millions of analysts, traders and journalists?

This week’s news

NY Times’ DealBook discusses if board members should be licensed

In his book ‘On Board: The Modern Playbook for Corporate Governance’, Jonathan Foster, former managing director at Lazard and a veteran of over 50 corporate boards, proposes that board members should hold licenses to ensure a baseline of competence. DealBook reports that Foster highlights a lack of financial and M&A literacy among some directors and argues that mandatory certification could boost confidence in board oversight. He suggests requirements such as 10 years of experience, a minimum age of 35, and passing exams in accounting, legal standards and ethics. He argues that the certification could be overseen by the New York Stock Exchange and governed by institutions like the Harvard Business School, similar to how the Public Company Accounting Oversight Board (PCAOB) operates under the Securities and Exchange Commission (SEC). On the flip side, NYU professor Edward Rock counters that such standardisation could exclude talented individuals, such as company founders like Mark Zuckerberg or Larry Page, from board roles. Rock maintains that shareholders tend to demand the most qualified members, so the need for standardisation is unnecessary.   

UK companies face record profit warnings – The Times

According to EY, the number of profit warnings issued by UK-listed companies rose by 20% to 59 in Q2 2025, reports The Times. 46% of warnings were attributed to government policy changes and geopolitical uncertainty, up from 4% in Q2 2024, and the highest since EY began tracking over 25 years ago. This jump followed US tariff threats in April, which alone led to a 24% increase in profit warnings that month. Jo Robinson, restructuring strategy leader at EY, noted that global policy volatility is weighing heavily on business confidence and decision making, with the industrial support services and retail sectors among the hardest hit. UK businesses have also had to factor in the rise in labour costs following the increase in national insurance contributions and minimum wages in April. Silvia Rindone, retail partner at EY, has advised that companies should continue to invest in AI and tech to remain competitive, despite the ongoing cost pressures, with the winners being the ones who get the ‘basics’ such as range, service, and pricing, correct. 

A new era of corporate governance:  the quiet power of the Big Three institutional investors – IR Impact

According to IR Impact, a quiet shift is taking place within global corporate governance, driven by asset management giants BlackRock, Vanguard, and State Street Global Advisors, collectively known as the ‘Big Three’. Together, they manage over $24 trillion in assets, hold around 25% of voting shares in the US, and are the largest shareholders in 88% of the S&P 500. Unlike activist investors who carry out larger-scale public campaigns, the Big Three use passive investing to strategically engage with executives via private dialogue, therefore shaping decisions long before it reaches an AGM. Conversely, whilst they push for long-term value creation, some critics raise concerns over the effectiveness of their governance – specifically that there could be conflicts of interest with investee companies, that they are less likely to hold management to account for poor performance, and that there is a risk of narrow corporate oversight if power is concentrated among a select few. For IROs, this shift requires understanding the priorities of the Big Three, who are consistently in favour of long-term value creation, sustainability, and strong governance. Firstly, IROs should align with the Big Three’s voting guidelines and letters, without compromising the company’s autonomy. Secondly, engagement should be proactive and consistent – sharing goals and ESG initiatives early and frequently is preferred. Importantly, whilst the Big Three are major stakeholders, they are not the only ones, so ensuring a balance between them and other shareholders is key. Finally, staying on top of the evolving regulatory environment is vital to remain alert to changes that could impact shareholder influence. 

Bloomberg’s Matt Levine on the big differences between private and public companies

The traditional distinctions between public and private markets are being blurred as private companies are becoming increasingly accessible to a broader investor base, even in the absence of financial disclosures. Institutions are already adapting. The White House is finalising proposals to include private equity investments in 401(k) retirement plans, making private investment more accessible to regular investors. In a pioneering move, JP Morgan has recently expanded its analyst research coverage to cover private companies such as OpenAI. Unlike equity research on public firms, private market research won’t include ratings, price targets, or estimates. However, the move recognises the role of private companies in influencing macro growth outlooks in their respective industries and highlights a broader shift towards improved visibility into private assets. After all, Levine contends in his Money Stuff newsletter, if sell-side research on public companies is a way to provide forward-looking financial information for investors seeking to make informed decisions, why not do the same for private companies too?

A good time to be in IR? Bloomberg on the flood of “dumb money” into risky companies with little or no profitability

Once again retail investors are driving dramatic share price swings in low cost, heavily shorted ‘meme stocks’- this time turning their attention to companies such as Opendoor Technologies and Kohl’s. Echoing the 2021 surge, the renewed wave of speculative trading and high appetite for risk comes at a time of broad market euphoria in the US, with the S&P 500 at an all-time high. However, unlike during the pandemic era, Bloomberg reports, today’s investors face a more challenging economic backdrop, with higher interest rates, persistent inflation and fewer financial safety nets. This makes piling investments into risky companies with low profitability increasingly dangerous. Consequently, IROs will be under increasing pressure to respond if their companies are targeted by sudden price hikes and trading volume surges. Understanding the motivations of retail investors, and the social media forums which they operate in, will become increasingly vital. Companies will need to prepare for an agile response and messaging plan, should they become subject to the next ‘meme stock’ euphoria.

And finally… the FT asks some questions: If the market is open 24 hours a day… will Tesla start announcing earnings at 11.59pm, ruining the sleep cycles of millions of analysts, traders and journalists?

Whilst the push for round-the-clock markets isn’t new, the always-on nature of app-based and crypto trading has contributed to rising expectations of 24-hour market access. The London Stock Exchange is floating the idea, especially as the ‘transatlantic flip’ of UK-listed firms to the US have highlighted the challenge of trading hours across different time zones. FT Lex suggests that whilst the idea sounds logical, it’s an innovation that nobody needs, citing the logistical, human and communication challenges that always-on trading could create. Extended hours could mean that company news and stock fluctuations play out when executive leaders and IR teams can’t respond. The idea would also require companies invest in 24/7 market monitoring, more advanced digital tools and revise their IR response strategies. Ultimately, the proposals to shift to 24-hour trading wouldn’t just be a technical shift, it would be a cultural shift, too. IR functions, and the people that lead them, will need to prepare for a market that truly never sleeps.