2017 GLOBAL TRENDS IN INVESTOR RELATIONS. A Survey Analysis of IR Practices in. Financials
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- Piers Fitzgerald
- 5 years ago
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1 17 GLOBAL TRENDS IN INVESTOR RELATIONS A Survey Analysis of IR Practices in Financials $
2 Contents Key Findings Interaction with the Investment Community Interaction with the Sell Side Company Internal Communications IR Strategy and Objectives IR Personnel and Infrastructure ESG and Involvement with Board of Directors Global Capital Markets An Eye for the Future Methodology
3 Key Findings This report is an analysis of the 14 responses from participants in Financials sector companies (Financials respondents) to the BNY Mellon 17 Global Investor Relations Survey compared with responses of the 537 participants globally. These responses are broken down by market capitalization to provide comparisons and conclusions. There are several key differences demonstrated between a significant portion of Financials respondents and their peers. Financial respondents at mid- and small-cap companies say they or their IROs are less likely to meet investors without c-suite management present while on roadshows (29.1%) than respondents globally (45.3%) or their mega- and large-cap sector peers (44.4%). Mid- and small-cap Financials respondents also report lagging in holding analyst/investor days and using video conference calls. They received fewer invitations to broker-sponsored conferences (12.6 vs for mega- and large-cap Financials respondents) while in turn also attending fewer conferences than Financial respondents in megaand large-caps. Despite these challenges, a higher percentage of mid- and small-cap Financials respondents say they plan to increase engagement with all type of investors in the next 12 months. North America remains the top roadshow destination for Financials respondents, as it was for respondents globally in the 13 and 15 BNY Mellon Global Investor Relations Surveys, particularly the United States, with New York City and Boston leading, followed by Europe, with London, Paris and Edinburgh visited the most. When reporting their IR teams goals, Financials respondents are aligned with respondents globally, the highest percentage choosing to expand or enhance engagement with existing investors. When choosing investor targeting criteria, the highest percentage of mega- and large-cap Financials respondents (74%) selected investment style as a top priority, in line with the global average (65%), while the highest percentage of mid-cap and small-cap Financials respondents cited peer ownership instead. Financials respondents in mid- and small-cap companies say that their IR function devotes significantly less time to corporate social responsibility, with only 2% reporting this activity as compared to 28% of Financials respondents in mega- and large-cap companies. Similarly, only 19% of the mid- and small-cap Financials 2
4 respondents say their companies have a specific policy to reach out to ESG and socially responsible investors, compared to 39% of mega- and large-cap Financials respondents. When asked their reason for targeting socially responsible and/or ESG investors, 71% of mega- and large- cap Financials respondents say they reach out to shareholders of all types. In comparison, 45% of mid- and smallcap Financials respondents say they target socially responsible and/or ESG investors in order to reach long-term investors. Financials respondents at mega- and large-cap companies say they or their IROs are more likely than the global average to participate in the financial management committee (54% vs. 51%) as well as to participate in the social responsibility committee (28% vs. 18%). At the same time, Financial respondents at mega-and large cap companies say their IR teams are less likely than their peers globally to directly participate in internal corporate communications (34% vs. 41%) and are more likely than their peers globally to relay materials produced by the IR team to corporate communications for their use. Ranking areas of influence on the IR function in the next 1 years, Financials respondents align with the global average, with the greatest number choosing the rise of passive investing and the function of the sell side. Financials respondents in mega- and large- cap companies are also in alignment with respondents globally that the most essential skills for IR practitioners in the future will be financial analysis and interpersonal communications skills. Mid- and small-cap Financials respondents, while agreeing on financial or peer analysis as the most important, rank strategic planning and analysis second, instead of interpersonal communications. 3
5 Interaction with the Investment Community WHAT IS THE TOTAL NUMBER OF INVESTOR ONE-ON-ONE MEETINGS YOU HOLD PER YEAR: Mean Summary Inside Your Company's Home Market Outside Your Company's Home Market WHAT PERCENTAGE OF INVESTOR ONE-ON-ONE MEETINGS THAT YOUR COMPANY HOLDS IN A YEAR ARE CONDUCTED BY INVESTOR RELATIONS STAFF WITHOUT THE PRESENCE OF SENIOR MANAGEMENT?
6 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- IN THE PAST 12 MONTHS, HOW MANY ROADSHOWS WERE ATTENDED BY THE FOLLOWING IN YOUR COMPANY: Mean Summary Inside Your Company's Home Market Outside Your Company's Home Market Chief Executive Officer Chief Financial Officer IRO/Head of IR Operational Head(s) Members of Board of Directors Corporate/Company Secretary
7 IN TERMS OF THEIR TOTAL TIME DEVOTED TO IR RELATED ACTIVITIES, WHAT PERCENTAGE DOES EACH OF THE FOLLOWING SENIOR MANAGERS SPEND WITH: Mean Summary Chief Executive Officer Chief Financial Officer Investor Relations Officer 1 8 EXISTING INSTITUTIONAL INVESTORS PROSPECTIVE INSTITUTIONAL INVESTORS SELL-SIDE ANALYSTS/EQUITY SALES RETAIL INVESTORS FINANCIAL MEDIA
8 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- Corporate Secretary Corporate Governance Officer Corporate Social Responsibility/ Sustainability Team
9 IN THE PAST 12 MONTHS, IN WHICH CITIES DID YOU MEET INVESTORS? CANADA Toronto Montreal 33% 16% 38% OF THE FINANCIAL SECTOR 43% 49% 15% 1% 24% % 15% 1% UNITED STATES New York City Metro Area Boston, MA San Francisco, CA Chicago, IL 79% 67% 43% % 88% OF THE FINANCIAL SECTOR 82% 92% 75% 1% 76% 85% 65% 1% 53% 58% 43% 1% 52% 58% 39% 1% Los Angeles/ San Diego, CA 8 1 Mid-Atlantic Region 8 1 Texas 8 1 Denver, CO 8 1 Kansas City Metro Area 38% 22% 18% 14% 13% 44% 33% 27% 21% % 63% 36% 3% 23% 25% 17% 21% 7% 5% 3% 1% 1% 1% % 1% Atlanta, GA Fort Lauderdale, FL Charlotte, NC Minneapolis, MN 8% 6% 1% 12% 12% 6% 2% 21% 23% 1% 3% 5% 5% 5% 3% 3% 1% % % % LATIN AMERICA Brazil Chile Mexico Argentina 11% 7% 6% 2% 19% OF THE FINANCIAL SECTOR % 15% 3% % % 13% 3% % 2% 13% 5% % % 2% 3% %
10 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- EUROPE London, UK Paris, France Edinburgh, UK Frankfurt, Germany 67% 29% 26% 25% 74% OF THE FINANCIAL SECTOR 64% 88% 47% 1% 26% 39% % 1% 25% 49% 14% 1% 29% 32% 11% 1% Geneva, Switzerland Amsterdam, Netherlands Stockholm, Sweden 19% 18% 13% 25% 21% 13% 22% 35% 25% 9% % 8% 1% 1% 1% EEMEA ASIA- PACIFIC Hong Kong, China Singapore 33% 33% 31% OF THE FINANCIAL SECTOR 47% OF THE FINANCIAL SECTOR 26% 48% 22% 1% 26% 48% 29% 1% Eastern Europe The Middle East Tokyo, Japan Sydney, Australia Shanghai, China 3% 12% 21% 7% 7% 3% 5% 23% 1% 5% 3% 24% 38% 18% 6% 8% 27% 7% 5% 4% % % 1% % % Africa 3% Seoul, South Korea 1% 3% 9% 3% 3% 1% % % 8 1 1% 8 1 9
11 IN THE NEXT 12 MONTHS, DOES YOUR COMPANY PLAN TO INCREASE OR DECREASE ENGAGEMENT WITH THE FOLLOWING INVESTOR SEGMENTS: Prospective Institutional Equity Investors Asset Owners Existing Shareholders 56% % 68% 69% 64% 49% 42% 34% 48% 42% 32% 35% INCREASE STAY THE SAME 43% 5% % 32% 57% 66% 52% 31% 57% 66% 62% 36% DECREASE 1% 1% % % 1% 1% % % 1% 2% 4% %
12 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- Prospective Institutional Debt Investors Financial Advisors/ Retail Brokers Retail Investors IN THE PAST 12 MONTHS, WHICH OF THE FOLLOWING EVENTS HAS YOUR COMPANY UNDERTAKEN WITH INVESTORS AND ANALYSTS? 35% 39% Conference Calls/Webinars (Not including Earnings Calls) 71% 24% 14% 17% 1% 13% 22% 16% 14% 16% 27% 63% 75% 71% 1% % 82% 64% 61% 8% 87% 83% 76% 3% 4% 2% % % 83% 84% 7% 3% 3% 4% 2% Corporate Headquarters Visits 66% 67% 59% 66% % Analyst/Investor Days 58% 52% 61% 41% 1% 8 1 3% 3% % 3% Operating Facility Visits (Factory, Production Unit) 46% 43% 22% 36% % Video Conference Calls % 24% 43% 1 3% 1%
13 IN THE PAST 12 MONTHS, HOW MANY BROKER-SPONSORED CONFERENCES HAS YOUR COMPANY: Mean Summary Been Invited To Inside Home Market Outside Home Market Participated In DO THE FOLLOWING POSITIONS IN YOUR COMPANY DEVOTE TIME TO IR-RELATED ACTIVITIES? Investor Relations Officer Chief Financial Officer Chief Executive Officer 92% 92% 98% 9% 1% 87% 87% 92% 93% 1% 86% 91% 93% 89% 1% Corporate Social Responsibility/ 8 1 Sustainability team Corporate Secretary 8 1 Corporate Governance 8Officer 1 17% 17% 28% 2% 1% 17% 17% 13% 13% % 1% 12% 13% 9% %
14 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- IN THE PAST 12 MONTHS, HAS YOUR COMPANY COMMUNICATED WITH ASSET MANAGEMENT FIRMS WITH A PREDOMINANTLY PASSIVE INVESTMENT STYLE? Yes No Uncertain 32% 34% 41% 36% 48% 49% 41% % % 17% 18% 24% WHO WAS INVOLVED IN THE MEETING/DISCUSSION WITH THOSE FIRMS? BASE: Respondents that communicated with asset management firms with a predominantly passive investment style Investor Relations Officer Chief Financial Officer Chief Executive Officer 91% 89% 1% 67% 1% 41% 32% 37% 47% 1% 28% 23% 21% 47% 1% 8 1 Corporate Governance Officer 8 1 Board Members 8 1 Other 24% 38% 24% 34% 1% 14% 22% 13% 19% % 11% 13% % 14% %
15 Interaction with the Sell Side PLEASE CHOOSE MEANS BY WHICH YOUR COMPANY RECEIVES INTRODUCTIONS TO INVESTMENT PROFESSIONALS Sell-Side/Broker-Sponsored Roadshows and Conferences Internal Investor Relations Department Independent Equity Research Firm Roadshows and Conferences % 92% 92% 89% 72% 76% 8% 7% % 37% 44% 35% External IR Firm/Consultancy Other Sources 18% 18% 8% 21% 4% 5% 4% 5% 14
16 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- WHAT PERCENTAGE OF YOUR CONTACT WITH INVESTORS HAS BEEN FACILITATED BY THE FOLLOWING IN THE PAST 12 MONTHS: Mean Summary Global 8% 57% 3% 4% 1% Developed Markets 5% 58% 32% 4% 1% KEY Independent Equity Research Firm Roadshows and Conferences Sell-Side/Broker- Sponsored Roadshows and Conferences Internal Investor Relations Department Mega- and Large-Caps 11% 56% 31% Mid- and Small-Caps 4 % 62% 26% External Investor Relations Firm/ Consultancy Other Sources 1% 7% 2% % 15
17 8 1 IN THE PAST 12 MONTHS, HAVE SELL-SIDE OFFERS TO GO ON NON-DEAL ROADSHOWS: % 39% 49% 51% INCREASED 1 8 STAYED THE SAME 42% 49% 47% 47% 32% DECREASED 7% 6% 2% 14% 1 8 DID NOT RECEIVE OFFERS FROM SELL SIDE 7% 5% 3% 3% 16
18 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- DO YOU FEEL THAT YOUR CURRENT ANALYST COVERAGE CORRECTLY REFLECTS THE OUTLOOK FOR YOUR COMPANY'S PERFORMANCE IN THE FOLLOWING TIMEFRAMES Short Term (less than 1 year) Medium Term (1 to 3 years) Long Term (3 to 5+ years) % 72% 68% 76% 8 57% % % 64% 8 YES 32% 33% 29% 33% UNCERTAIN 14% 15% 13% 12% 22% 21% 11% 21% % 42% 42% 35% NO 15% 13% 19% 12% 22% 19% 28% 15% 28% 26% 29% 32%
19 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- WHICH OF THE FOLLOWING CRITERIA DOES YOUR COMPANY USE TO SELECT A BROKER FOR A NON-DEAL ROADSHOW? Quality of Investor Targeting Provided by Broker 64% 69% 62% 66% Geographic Presence 58% 59% 65% 49% Corporate Access Team 57% % 69% 65% Insight on Current Investor Demand 51% 55% 55% 55% Ability to Provide Own Targets to the Broker Equity Sales Capabilities 51% 58% 52% 43% 46% 38% 5% 61% Management of Logistics Quality of Formal Post-Meeting Feedback Research Recommendation (Buy, Hold, Sell) Reviewing the Roadshow Schedule Ahead of Time and Providing Changes Investment Banking Relationship 39% 51% tt41% 34% 39% 44% 35% 46% 34% 33% 34% 53% 31% 36% 31% 32% 24% 23% 29% 32% Financial Coverage of Logistics 17% 17% 23% 23% Other 3% 4% 2% % Do Not Use Brokers for Organizing Roadshows 8% 6% 9% 3% KEY 18 -% LEAST SELECTED 21-% 41-% 61-8% 81-1% MOST SELECTED
20 Company Internal Communications IN THE PAST 12 MONTHS, WHAT HAS BEEN YOUR LEVEL OF INVOLVEMENT IN EMPLOYEE COMMUNICATIONS? IR team supports formulation of communications on company results and investor sentiment for employee communications 41% 43% 34% 39% Corporate communications team uses material produced by IR team for employee communications 27% 27% 34% 3% IR team comments on employee communications materials only as needed 8 17% % 17% 19% IR team is not involved with employee communications at all 15% 11% 14% 12% 1 19
21 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL IS THE MOST SENIOR INVESTOR RELATIONS OFFICER CURRENTLY A MEMBER OF THE FOLLOWING MANAGEMENT COMMITTEES? Finance Corporate Strategy Corporate Governance Business Segment/ Operating Committee % 54% 54% 36% % 29% 23% 35% % 25% 19% 21% 8 7 % 19% 17% 27% Corporate Social Responsibility 18% % 28% 15% Human Resources Other None of the Above % 6% 5% 9% 8 7 9% 8% 18% 5% % 24% 25% 29%
22 IR Strategy and Objectives WHAT CRITERIA ARE USED BY THE INVESTOR RELATIONS DEPARTMENT TO TARGET NEW EQUITY INVESTORS? Investment Style (Value, GARP, etc.) 65% 74% 69% 65% Peer Ownership 59% 64% 75% 72% Sector Focus 51% 52% 41% 65% Equity Assets under Management 48% 53% 63% 41% Average Holding Period (Turnover) Type of Investor (Mutual Fund, Pension Fund, etc.) 44% 49% % 34% 37% 38% 44% 37% Regional/Country Focus Thematic Focus (Sustainability, Commodities, Blue-Chip, etc.) Depositary Receipts under Management 33% 27% 42% 44% 12% 14% 13% 8% 5% 3% 9% 3% Other 1% 2% 1% % Do Not Target New Investors 8% 5% 8% % KEY -% LEAST SELECTED 21-% 41-% 61-8% 81-1% MOST SELECTED 21
23 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- WHAT ARE YOUR TOP GOALS FOR THE INVESTOR RELATIONS FUNCTION/PROGRAM IN THE NEXT 12 MONTHS? Expand or Enhance Engagement with Existing Shareholders 61% 65% 68% 55% Diversify Shareholder Base 47% 45% 64% 49% Improve Disclosure 37% 32% 46% 37% Greater Management Visibility/Accessibility 3% 29% 25% 32% Increase Research Coverage 26% 24% 1% 32% Increase International Shareholder Ownership 24% 26% 23% 23% Increase Liquidity % 16% 13% 19% Raise IR Profile within Organization More Interaction with the Board of Directors Increase Domestic Shareholder Ownership 19% 21% 22% 16% 8% 1% 2% 6% 8% 11% 1% 16% Build Retail Ownership 7% 8% 6% 5% Leveraging Media to Support IR Strategy 5% 4% 2% 5% Other 7% 8% 8% 5% KEY -% LEAST SELECTED 21-% 41-% 61-8% 81-1% MOST SELECTED 22
24 WHICH OF THE FOLLOWING METRICS DOES YOUR COMPANY USE TO EVALUATE THE EFFICIENCY/PERFORMANCE OF ITS IR PROGRAM? Quantitative Number of Analysts Covering Stock Number of Investor One-on-One Meetings Relative Valuation of Stock Stock Price Other % 35% 36% 59% 58% 54% 65% 66% 41% 41% 42% 44% 24% 21% 17% 16% 12% 12% 9% 8% Qualitative Efficient Use of Senior Management's Time 1 Perception Study ("Formal") Feedback 1 Quality of Information in Analyst Reports/ Recommendations 1 Quality of Investor One-on-One Meetings 1 1 Other % 61% 73% % 41% 41% 51% 36% 59% 58% 63% 62% 67% 76% 73% 7% 7% 8% 7% 8% 23
25 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- IS YOUR COMPENSATION (SALARY AND/OR BONUS) DIRECTLY LINKED TO THESE METRICS OF IR EFFECTIVENESS? Global 11% 7% 32% 5% Developed Markets 12% 7% 31% 51% KEY Linked to Qualitative Measures Linked to Quantitative Measures Linked to Qualitative and Quantitative Measures Not Linked to any Measures of Investor Relations Effectiveness Mega- and Large-Caps 14% 6% 42% 38% Mid- and Small-Caps 12% 12% 33% 43% 24
26 HOW OFTEN DOES THE INVESTOR RELATIONS DEPARTMENT PROVIDE INTELLIGENCE TO THE FOLLOWING: Chief Executive Officer Chief Financial Officer Board of Directors Daily % 12% 24% 3% 26% 22% 35% 19% 2% % 7% % Weekly % 29% 24% 27% 3% 33% 28% 24% 4% 5% 5% 6% Monthly % 21% 17% 21% 15% 14% 14% 18% 19% 18% 21% 14% Quarterly % 11% 15% 5% 8% 7% 11% 2% % 44% 31% 46% Semi-Annually % 1% % 3% 1% % % 3% 3% 4% 6% 6% Annually % 1% % % % % % % 3% 3% 3% % As needed % 24% % 39% 19% 21% 12% 32% 23% 23% 21% 16% Never % 1% % 3% 1% 1% % 3% 6% 3% 7% 12% 25
27 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- WHAT TYPE(S) OF INTELLIGENCE DOES THE INVESTOR RELATIONS DEPARTMENT PROVIDE TO THE FOLLOWING: Chief Executive Officer Chief Financial Officer Board of Directors Investment Community Feedback 84% 88% 85% 83% 87% 9% 9% 84% 56% 64% 55% 56% Sell-Side Analyst Opinions 83% 9% 89% 84% 84% 89% 89% 95% 57% 69% 61% 57% Ownership Information 75% 79% 84% 68% 76% 8% 78% 76% 55% 64% 54% 58% Stock Performance 7% 66% 78% 73% 71% 69% 72% 72% 55% 58% 58% 49% Peer Information 65% 65% 64% 69% 69% 7% 72% 7% 37% 38% % 32% Industry Trends 53% 52% 52% 58% 57% 55% 56% 56% 29% 25% 33% 23% Market Trends and Developments 51% 54% 53% 48% 58% 61% 61% % 31% 31% 33% 25% Financial Analysis 49% 42% 61% 45% % 53% 63% 67% 28% 23% 28% 39% Media Mentions 27% 26% 17% 24% 29% 27% 23% 27% 11% 13% 12% 15% Strategic Planning and Analysts 22% 21% 25% 23% 27% 25% 34% 31% 11% 9% 11% 14% Risk Management 7% 5% 7% 5% 9% 6% 1% 5% 4% 3% 4% 6% Other % % % 3% 1% 1% % 3% 1% 1% % 3% Do Not Provide Market Intelligence 1% 1% % % 2% 2% 2% % 12% 8% 14% 8% 26
28 WHAT TYPES OF GUIDANCE DOES YOUR COMPANY PROVIDE AND HOW FREQUENTLY? Quarterly Annually with Quarterly Updates Annually Do Not Give This Type of Guidance Revenues 29% 31% 27% 29% 19% 26% 24% 1% 15% 14% 12% 11% 36% 29% 38% 49% Earnings 27% 29% 25% 27% 18% 26% 16% 1% 14% 17% 11% 16% % 27% 47% 47% Margins 25% 25% 31% 21% 16% % % 5% 17% 16% 15% 16% 42% 39% 33% 57% Balance Sheet Metrics % 22% 28% 21% 12% 16% 15% 8% 1% 13% 12% 1% 55% 5% 45% % Cash Flows 16% 16% 14% 15% 13% 18% 7% 5% 13% % 7% 5% 58% 46% 72% 75% Capital Expenditures % 9% 14% 11% 17% % 5% 8% 31% 29% 16% 13% 39% 42% 65% 67% Non-Financial Goals % 11% 17% % 13% 14% 12% 8% 25% 27% 15% 6% 49% 48% 56% 67% Other 7% 8% 1% 13% 9% 14% 12% 8% 13% 14% 11% 8% 71% 64% 67% 71% 27
29 IR Personnel and Infrastructure HOW MANY EMPLOYEES ARE IN YOUR COMPANY'S IR DEPARTMENT? Mean Summary Total Investor Relations Professionals and Support Staff WHAT IS THE TOTAL ANNUAL BUDGET IN U.S. DOLLARS FOR YOUR COMPANY'S INVESTOR RELATIONS PROGRAM (excluding staff compensation/remuneration)? Mean Summary $499, Professional Investor Relations employees Support staff $59,732 $762,868 $295,534 $117,
30 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- WHAT PERCENTAGE OF YOUR ANNUAL IR BUDGET IS DEVOTED TO: Mean Summary Annual/Extraordinary General Meetings Annual Report External IR Services Formal Investor/Analyst Day Presentations Stock Exchange Fees Travel Other
31 ESG and Involvement with Board of Directors WHAT IS THE INVOLVEMENT OF YOUR COMPANY'S MOST SENIOR INVESTOR RELATIONS EXECUTIVE AT BOARD OF DIRECTORS' MEETINGS? Global 23% 28% 6% 43% Mega- and Large-Caps % 35% Developed Markets 19% 3% 5% 46% Mid- and Small-Caps 11% 38% KEY Attends Board of Directors' Meetings and Presents Frequently Attends Board of Directors' Meetings and Presents Sometimes Attends Board of Directors' Meetings but Does Not Present Does Not Attend Board of Directors' Meetings 7% 3% 38% 48% 3
32 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- HAVE ANY OF YOUR BOARD MEMBERS MET WITH INVESTORS IN THE PAST 12 MONTHS? YES 53% 51% 53% 42% NO 8 47% 49% 47% 58% 1 WHY DID MEMBER(S) OF THE BOARD OF DIRECTORS NOT MEET WITH INVESTORS? Investors Have Not Requested 46% 51% 33% 48% No Company Policy to Meet with Investors Company Policy is not to Meet with Investors 36% 31% 39% 39% 11% 12% 7% % Board Member Preference 3% 2% 12% % Other 4% 4% 1% 13% KEY -% LEAST SELECTED 21-% 41-% 61-8% 81-1% MOST SELECTED 31
33 WHEN MEMBERS OF THE BOARD OF DIRECTORS HAVE MET WITH INVESTORS, WHAT WAS DISCUSSED AT THESE MEETINGS? Company Strategy 81% 75% 81% 93% Management Performance % 41% 42% 45% Merger/Acquisition 33% 29% 33% 18% Environmental, Social and Governance Issues Board of Directors' Evaluation/Structure 29% 38% 48% 27% 28% 37% 49% 45% Remuneration 23% 29% 46% 16% Risk Exposure 21% 19% 27% 23% Capital Structure (Preferential Shares, etc.) Potential Changes in Corporate Control (Hedge Fund Activism, Hostile Action) 21% 19% 25% 3% 1% 11% 6% 7% Minority Shareholder Rights 9% 9% 14% 21% Other 6% 8% 9% % Unsure 5% 6% 3% % KEY -% LEAST SELECTED 21-% 41-% 61-8% 81-1% MOST SELECTED 32
34 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- DOES YOUR COMPANY HAVE A WRITTEN STRATEGY TO COMMUNICATE WITH KEY INVESTORS ABOUT CORPORATE GOVERNANCE ISSUES ON A REGULAR BASIS? Yes No Uncertain 33% 34% 44% 43% 5% 53% 44% 54% 16% 12% 12% 3% DOES YOUR COMPANY REACH OUT TO SOCIALLY RESPONSIBLE AND/OR ESG INVESTORS TO TARGET THEM AS POTENTIAL INVESTORS? Global 29% % 5% 52% 15% Mega- and Large-Caps 39% Developed Markets 26% % 6% 57% 11% Mid- and Small-Caps 19% KEY Yes, Both Socially Responsible and ESG Investors Yes, but Only Socially Responsible Investors Yes, but Only ESG Investors No, This is Not Part of Our Investor Relations Strategy Uncertain % % 7% 2% 46% 8% 65% 14% 33
35 WHY DOES YOUR COMPANY CURRENTLY REACH OUT TO SOCIALLY RESPONSIBLE AND/OR ESG INVESTORS? BASE: Respondents that reach out to socially responsible and/or ESG investors Company Reaches Out To Shareholders of All Types To Reach Long-Term Investors To Diversify the Shareholder Base % 61% 71% 22% 46% 45% 54% 45% 44% 41% 73% 69% Management Priority 22% 24% 14% 27% Board of Directors' Priority 14% 1% 15% 27% IF YOUR IR TEAM HAS ENGAGED WITH PROXY ADVISORY FIRMS, WHY? BASE: Respondents that engage with proxy advisory firms We find engagement provides a greater understanding of the governance concerns of investors They have significant impact on the outcome of agenda items at our shareholder meetings We accepted an invitation to engage from the proxy advisory firm(s) 66% 63% 65% 41% 45% 48% 51% % 22% 23% 3% 36% Other 6% 8% 3% 12% KEY -% LEAST SELECTED 21-% 41-% 61-8% 81-1% MOST SELECTED 34
36 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- DOES THE INVESTOR RELATIONS TEAM MONITOR ITS ESG RATINGS? Yes No Uncertain 45% 41% 59% 32% 47% 53% 35% 54% 8% 6% 6% 15% DOES THE INVESTOR RELATIONS TEAM ENGAGE WITH ESG RATINGS FIRMS? Yes No Uncertain 34% 3% 52% 24% 57% 63% % 65% 9% 7% 8% 11% DOES THE INVESTOR RELATIONS TEAM ENGAGE WITH PROXY ADVISORY FIRMS? Yes No Uncertain 42% 49% 59% 5% 44% 42% 25% 37% 15% 9% 15% 14% 35
37 Global Capital Markets FOR YOUR COMPANY, WHICH OF THE FOLLOWING COUNTRIES/MARKETS WILL BE OF THE MOST STRATEGIC IMPORTANCE IN THE NEXT FIVE YEARS AS SOURCES OF NEW OR INCREASED INVESTMENT: 1 8 8% 84% 81% 8% UNITED STATES % 19% 18% 32% OTHER COUNTRY/MARKET % 6% 16% 6% BRAZIL 36
38 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL % 55% 73% 43% UNITED KINGDOM 17% 23% 13% 12% GERMANY 4% 2% 5% % RUSSIA % 2% % 2% SOUTH KOREA % 25% 21% 8% CHINA % 24% 24% % JAPAN 4% 2% 4% 5% TAIWAN % 1% 7% 15% 1 INDIA 8 4% 2% 6 3% SOUTH 1 AFRICA 8 26% 16% 41% 21% SINGAPORE % 18% 39% 14% HONG KONG 3% 4% 2% 6% 1 8 INDONESIA 12% 14% 17% 18% AUSTRALIA 37
39 An Eye for the Future BASED ON YOUR EXPERIENCE, WHAT WOULD YOU RANK AS THE MOST ESSENTIAL SKILLS FOR FUTURE IR PRACTITIONERS? Financial or Peer Analysis 41% 41% 45% 54% Interpersonal Communication 26% 29% 18% 16% Strategic Planning and Analysis 15% 13% 11% 26% Foreign Language Skills 6% 3% 4% % Leadership and Team Management 5% 6% 8% % Global Acumen 5% 5% 9% 4% Proficiency in New Technology 1% 1% 2% % Risk Management % % 1% % KEY -% LEAST SELECTED 21-% 41-% 61-8% 81-1% MOST SELECTED 38
40 KEY GLOBAL TOTAL DEVELOPED MARKETS MEGA- AND LARGE- MID- AND SMALL- OVER THE NEXT 1 YEARS, WHICH OF THE FOLLOWING AREAS WILL HAVE THE GREATEST INFLUENCE ON THE FUNCTION OF INVESTOR RELATIONS? Changing Shareholder Structure (Passive Investment vs. Active Investment) 56% 66% 49% 65% Function of the Sell Side (Provision of Research, Corporate Access, etc.) 47% 54% 45% 56% Inclusion of Nonfinancial Factors in Investor Decision-Making (Environmental, Social or Governance Issues) 42% 39% 42% 37% Market Transparency (Shareholder Disclosure, Trading Insight, etc.) 33% 25% 3% 35% New Regulatory Requirements 29% 24% 41% 18% Increasing Investor Stewardship (Voting Against Management Resolutions, etc.) 27% 33% 17% 15% Evolution and Integration of Reporting Regimes (GAAP vs. Non-GAAP, IFRS, GRI, SASB, etc.) 23% 25% 19% 17% Technology Integration (Data Analytics, CRM Systems, etc.) 18% 13% 3% 3% Changes in Travel, whether due to Budget, Ease of Movement, or Technology Advance 15% 12% 18% % KEY -% LEAST SELECTED 21-% 41-% 61-8% 81-1% MOST SELECTED 39
41 Methodology 14 Total Financial Respondents The BNY Mellon 17 Global Investor Relations Survey was conducted between March and May 17. The Survey was distributed to nearly 7, companies and captures the online responses of 537 respondents from 51 countries. This report, 17 Global Trends in Investor Relations: A Survey Analysis of IR Practices in Financials, uses the 14 responses from respondents working in Financial Services sector companies. Participants were sourced using internal and external sources and span all macroeconomic sectors and economy types, as defined by GICS and MSCI, respectively. Graphs and tables provided throughout this report may not capture the entire respondent pool due to rounding and participant requests for anonymity. In graphics depicting data sets equaling 1% per category, rounding may cause percentage totals to vary between 99% and 11%. Similarly, in graphics showing number sets, rounding may cause sums of subsidiary numbers to vary from the total. Market Capitalization Mega-Cap: > US$ 25 billion Large-Cap: = US$ 5 US$ 25 billion Mid-Cap: = US$ 1 US$ 5 billion Small-Cap: = US$ 15 million US$ 1 billion Micro-Cap: < US$ 15 million Note: No Survey respondent in the Financial sector was in the Micro-Cap category.
42 Respondent Profiles For Financials respondents, the IRO/Head of IR was the primary contact for the investment community for 84% of companies; the primary contact for 1% of companies was the Chief Financial Officer. Sixty-four percent of Financials respondents are the most senior IR executive at their companies. For Financials respondents, the gender identified by respondents for their company s most senior IR executive was 68% male and 32% female. PRIMARY CONTACT FOR INVESTMENT COMMUNITY: 84% IRO/Head of IR 1% Chief Financial Officer 6% Other MALE 68% FEMALE 32% 41
43 Global Investor Relations Advisory BNY Mellon s Depositary Receipts Global Investor Relations Advisory team works with DR clients to help them access liquidity, promote visibility and to build relationships with the sell side, institutional and retail investors and the financial media. We partner with our clients to help them more fully realize global market access opportunities. Guy Gresham Head, Global Investor Relations Advisory guy.gresham@bnymellon.com Laura Riley Market Connect Specialist laura.riley@bnymellon.com Karen Bodner Senior Capital Markets Advisory Specialist karen.bodner@bnymellon.com Diana Soto Market Connect Specialist diana.soto@bnymellon.com Parichat Charoenkitnapa Investor Relations Specialist parichat.charoenkitnapa@bnymellon.com Michael O Brien Corporate Governance Specialist michael.obrien@bnymellon.com Gina Doogue Market Connect Specialist gina.m.doogue@bnymellon.com Ludmila Lell Senior ESG Specialist ludmila.leliavskaia@bnymellon.com 42
44 We would like to thank the following groups for their support of the BNY Mellon Global Investor Relations Survey: Australasian Investor Relations Association (AIRA) Deutscher Investor Relations Verband e.v. (DIRK) Instituto Brasileiro de Relações com Investidores (IBRI) Brazilian Association of Public Companies (ABRASCA) IRSociety, United Kingdom Investor Relations Society, India IR Club, Germany Middle East Investor Relations Association (MEIRA) The Investor Relations Professionals Association Singapore (IRPAS) Turkish Investor Relations Association (TÜYİD) National Investor Relations Institute (NIRI) The Stock Exchange of Thailand (SET) CLIFF, France IR Magazine (Russia) We would like to acknowledge the contribution of Estuary Branding in the visualization in graphic form of the findings identified in the survey data. 43
45 Related Reports Breakout reports will be available for: GLOBAL REPORT CONSUMER GOODS & SERVICES UNITED STATES ENERGY GREATER CHINA TELECOMMUNICATIONS JAPAN BRAZIL HISPANIC LATIN AMERICA WESTERN EUROPE All available from 44
46 45
47 BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 1 markets. As of December 31, 17, BNY Mellon had $33.3 trillion in assets under custody and/or administration and $1.9 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on Follow us on or visit our newsroom at for the latest company news. This document, which may be considered advertising, is for general information and reference purposes only and is not intended to provide legal, tax, accounting, investment, financial or other professional advice on any matter, and is not to be used as such. BNY Mellon does not warrant or guarantee the accuracy or completeness of, nor undertake to update or amend the information or data contained herein. We expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon any of this information or data. We provide no advice nor recommendation or endorsement with respect to any company or securities. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities. If distributed in the UK or EMEA, this document may be a financial promotion and is for distribution only to persons to whom it may be communicated without breach of applicable law. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction in which such distribution or use would be contrary to local law or regulation. Similarly, this document may not be distributed or used for the purpose of offers or solicitations in any jurisdiction or in any circumstances in which such offers or solicitations are unlawful or not authorized, or where there would be, by virtue of such distribution, new or additional registration requirements. Persons into whose possession this document comes are required to inform themselves about and to observe any restrictions that apply to the distribution of this document in their jurisdiction. The information contained in this document is for use by wholesale clients only and is not to be relied upon by retail clients. BNY Mellon has various subsidiaries, affiliates, branches and representative offices in the Asia Pacific Region that are subject to regulation by the relevant local regulator in that jurisdiction. Not all products and services are offered in all locations. This material may not be reproduced or disseminated in any form without the prior written permission of BNY Mellon. Depositary Receipts: NOT FDIC, STATE OR FEDERAL AGENCY INSURED MAY LOSE VALUE NO BANK, STATE OR FEDERAL AGENCY GUARANTEE Trademarks and logos belong to their respective owners. 18 The Bank of New York Mellon Corporation. All rights reserved. 3/17
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