IR Monitor – 5 March 2025

In this week’s newsletter:

• In 2025, corporate eccentricity is a feature, not a bug. When growth seems abundant investors are more tolerant of oddities, argues the Financial Times
• The latest dilemma facing finance chiefs: what to tell investors about tariffs
• Who needs a CEO? Some thoughts from MarketWatch
• The City buzz word that spells trouble for financial hacks & flaks … and IR
• Capping board tenure would be activist kryptonite: a Reuters view. It would ward off dissident shareholders, or at least force them to refresh their own tired thinking
• And finally … guidance, social media and AI: IR Monitor Live is back

This week’s news

In 2025, corporate eccentricity is a feature, not a bug – Financial Times

With Elon Musk leading the charge, it appears that chief executives are getting more eccentric and outspoken. The FT writes that behaviour currently on display from certain individuals at the helm of sizable companies would have been completely unacceptable in the past. In a recent study, professors from Essec Business School and Stanford applied machine learning to analyse “performative atypicality” in corporate earnings calls and measure how much a company’s executive communication deviates from industry norms. Their findings revealed that companies with more atypical or unconventional language during earnings calls often received higher earnings estimates from analysts. This may suggest that, in today’s investment climate, eccentricity has become a valuable commodity and investors are increasingly drawn to the promise of extraordinary returns from companies run by extraordinary characters.

What to tell investors about tariffs

Finance chiefs are facing a new challenge of how to communicate with investors about the potential impact of tariffs on their businesses. As the Trump administration continues to issue, retract and threaten various tariff orders, CFOs are struggling to make accurate projections and provide meaningful guidance to investors in an increasingly uncertain environment. According to the Wall Street Journal, many CFOs are now adding caveats to  guidance or choosing to omit specific impacts due to the unpredictability of trade policies. As policy remains indeterminate, companies are likely to be tentative in providing information that is subject to change.

Who needs a CEO?

Since Intel Corp’s Chief Executive Officer, Pat Gelsinger, departed abruptly in December, the company’s stock price has risen a staggering 28% – without a CEO named in his place. Currently, Intel is being run by a team of three executives and MarketWatch contemplates whether this could become a viable option for other companies: while Intel’s case is notable, it’s not unique. Other companies which have achieved success without a central leader include videogame platform developer Valve Corp. which has been “boss free” since 1996. Another example of an innovative leadership structure is Semco who completely overhauled their organisation to create a flatter structure with only three management levels. While Intel’s post-CEO stock performance is impressive, experts caution that this approach may not be sustainable in the long term for larger corporations. 

City buzz word that spells trouble 

According to Tomorrow’s Business, “de-equitification” is increasingly becoming the word used when talking about the London Stock Exchange. What does it mean? “No one likes the stock market anymore.” Listings on the LSE fell to a record low in 2024, with only 18 new companies joining the market, and 88 companies either delisting or moving their listings elsewhere. A potential solution? The Times has hailed Pisces “the City’s secret weapon” to revive London’s stock market. A new trading system, Pisces will allow private companies to sell shares for a limited time without having to list on the LSE. While this may benefit the City in general, it’s still not great for the equity market. With a dry pipeline, those who are banking on thousands of companies returning to the London stock market are at risk.

Capping board tenure would be activist kryptonite – Reuters

Reuters Breaking Views reports that U.S. companies looking to avoid activist investors may do themselves a favour by re-visiting board member tenures. The average U.S. board member’s tenure is double that of a member in Britain, where directors are no longer viewed as independent after nine years. However, corporate culture often discourages directors from pushing out their colleagues, and market success can also override governance concerns. With data showing that two-thirds of activist investor campaigns between 2021 and 2024 targeted companies with at least three directors who had served in their roles for over a decade, shortening board member tenures may be an effective defensive measure that would, at the very least, force some activist investors to shift their strategies. 

And finally… IR Monitor Live is back

Join us for the latest edition of IR Monitor Live! In this episode, we discuss the importance of guidance for investors, why an increasing number of companies are turning to social media to engage investors, and the clear gap in the U.S. when it comes to AI disclosures.