IR Monitor – 9 April 2025

In this week’s newsletter:

• Wall Street analysts anguish over ‘Liberation Day’ laments the FT
• Forbes on how fewer directors drive better decisions
• Middle East listings feeling the heat on missed earnings reports Bloomberg. Arguably, too many companies are going public without a proper IR function in place
• CFO retirements hit 6 year high warns CityAM. Pressure from activist investors is a factor
• CEOs should give LinkedIn a rest argues The Times 
• And finally … the last-ever (?) Alex cartoon

This week’s news

Wall Street analysts anguish over ‘Liberation Day’ – Financial Times

Trump’s Liberation Day tariffs went far further than anyone had predicted, raising the effective tariff rate to the highest in a century. In response, analysts are scrambling, and “Liberation Day” has quickly turned into “Libation Day” for many on Wall Street, reports the FT. JPMorgan warns this could hike inflation by 1-1.5%, possibly pushing the U.S. uncomfortably close to a recession and Deutsche Bank is scratching its head at the “clownish methodology” behind the calculations. Meanwhile, Bank of America has taken a more optimistic stance, suggesting this could just be the starting point for negotiations and that a smidge of uncertainty has been removed, which is a good thing for equity investors. But, the bottom line remains that nobody knows anything for sure and Wall Street will continue to weather this period of uncertainty for the foreseeable.

Fewer directors drive better decisions

Paul Davis, the founder of Bank State, in his oped for Forbes Finance Council has called for companies to reduce the number of directors on their boards. Davis argues that smaller, more agile boards are more effective at navigating today’s complex financial landscape – an increasingly rare view in a world where M&A acts as a trigger for an enlarged board. Citing Enterprise Financial Services, Origin Bancorp and LINKBANCORP as examples of where companies have benefitted from trimming their executive board, the article advocates for smaller boards composed of individuals with specialised knowledge and varied perspectives. The takeaway is clear: sometimes, less is more. A smaller, more strategic board can be a powerful tool for driving better outcomes. 

Middle East listings feeling the heat on missed earnings – Bloomberg

Companies in the Middle East that capitalised on the region’s IPO boom but subsequently failed to meet their ambitious earnings targets are now facing the consequences, reports Bloomberg. The region has seen a growing number of high-profile listings stumble in early trading as investors push back at sky-high valuations, spilling over into earnings misses. Paolo Casamassima, CEO of the Middle East Investor Relations Association, has argued that the market reaction has come as a result of some companies preparing for IPOs without a proper IR function in place. With some hesitant to engage in investor calls out of fear of being confronted with tough questions, Casamassima notes that the best approach would be “to start setting up the IR function at least a year before the IPO.” Sameer Lakhani, managing director at Global Capital Partners, adds that companies prioritising communication are experiencing higher trading volumes as the market feels more familiar with the names and understands them better.

CFO retirement hits six year high

The past year has seen a disruption in the CFO landscape, with over 15% of CFOs at listed companies stepping down, primarily due to heightened regulatory requirements. New research spotlighted in City AM indicates that this turnover rate – the highest in six years for the UK and US – has reduced the average tenure of CFOs from 6.2 years to 5.8 years in 2024. More than half of the departing financial officers have transitioned to board roles or retired. While high levels of regulations have intensified market pressures, the research also highlights that pressure from activist investors has put additional demands on company execs, prompting CFOs to increasingly adapt how companies balance risk and manage their risk portfolios.

CEOs should give LinkedIn a rest

While LinkedIn is undoubtably a valuable tool for modern corporate communication, Harry Wallop argues in The Times that when posts focus more on enhancing the CEO’s personal brand rather than the company’s, “it’s time to step away.” In recent years, LinkedIn has become an increasingly popular channel in the world of CEOs, with the platform itself noting that there’s been a 52 per cent increase in CEOs posting in the past two years. Two years ago, just 12 per cent of FTSE 100 chief executives were on LinkedIn, now it is reportedly an incredible 85 per cent. However, when it comes to the content of these posts, Wallop is more sceptical. He argues that although getting a glimpse of chief execs at work can be invaluable for potential recruits, employees and outsiders alike, CEOs should ensure that they are shining a light on the company as opposed to themselves.

And finally… the last-ever (?) Alex cartoon

One of the stock market’s longest-standing commentators is the cartoon character Alex Masterley. For more than 38 years, Alex has been poking fun at companies, investors and indeed investor relations. The Daily Telegraph has decided not to renew the contract for the cartoon and it came to a sudden end last Friday. The IR Monitor will continue to feature the best of Alex which includes stories in the vaults and jokes halfway through the crafting. Some of the unpublished and rejected ideas may also appear at www.alexcartoon.com in due course. For now, we thank Alex for all the jokes and hope that he will one day return from 1986.