During this time of record volatility investor relations officers and executive management teams are being challenged with how best to engage with shareholders during this time of uncertainty. Understandably, many companies are withdrawing guidance or announcing proactive changes to their cost structure and cash allocation policies. Through all this Investor Relations teams may be tempted to scale back Investor Relations activities and wait until volatility reduces and there is more market visibility.
As the economic and human impact of COVID-19 continues to expand, IROs are expressing different concerns:
- What if markets remain volatile for months?
- How am I going to run an IR program without knowledge of my top shareholders?
- What are the investment strategies and motivations of our new investors?
While companies across the board are taking a hard look at costs and being thoughtful about what is deemed “essential”, Shareholder Identification and Surveillance remain mission critical tools for an IRO dealing with share volatility. Events such as a postponed AGM or important Corporate Action announcement necessitate an accurate view of the shareholder base to be executed, however, more routine IR activities also require an accurate shareholder view to be effective. IROs are consistently seeking shareholder updates ahead of board meetings, earnings call prep and any point when an IRO’s visibility into shareholder base is diminished. To better inform management teams, IROs are requesting monthly Top 100 investor updates to better track shareholder movements. Communication is critical in these volatile times and essential to ensuring key messages are communicated to the correct audience. If anything, these practices can differentiate successful investor relations programs in this environment.
As the impact of COVID-19 continues to spread we are finding there are aspects we can do without, including office space and face-to-face conversations as we adapt to these times. For an IRO, knowledge of your top investors and their activities has never been more important than when the world is in such flex.