As part of the inaugural NIRI Global IR Practices Seminar, Ipreo conducted a special perception study, surveying North America-based institutional investors to garner and gauge this constituency’s feedback and expectations of global investor relations practices.
North American investors are excited about the investment opportunities available in China, Latin America, and emerging Europe, but stress the importance of global communication effort catching up to the standards exhibited by U.S. companies. Investors rely on the investor relations officer for valuable information and insight into a company, and must trust that this information will be accurate and transparent in order to properly analyze their investment thesis.
Non-U.S. companies will greatly benefit from having a strong IR program that delivers knowledge about the business and industry, is accessible, provides visibility to management, and is able to articulate a balanced investment thesis.
· A majority of respondents 57% require a face-to-face meeting with senior management before investing in non-U.S. company;
· A 53% of respondents consider it sufficient to meet with IR in lieu of senior management for an initial meeting, as long as the IRO is fluent in English, knowledgeable and informed on managerial decisions, and can offer a comprehensive introduction to the company;
· Once invested, nearly three-quarters of the investor population will accept a meeting with IRas a follow-up to an earnings call or conference, for a timely business update, or for commentary and thoughts from other investors;
· Most respondents understand the logistical difficulties of having non-U.S. domiciled management teams travel to meet investors, and thus, only require visits to North America once or twice a year;
· For an initial meeting with a non-U.S. company, investors expect to gain a deep and clear understanding of the strategic outline and company overview, meet management and gauge executives’ credibility and transparency, and assess the company financials;
· Investors are hesitant to invest in non-U.S. company if they encounter corporate governance issues, poor transparency, inconsistent communication, or uncertain political regulations.
Respondent suggest that the best ways to enhance corporate communications are to improve disclosure and transparency, increase the visibility and accessibility of management, and eliminate any language barriers by providing English information on the company website.
This survey was pull out from IR Update, February, edited by NIRI