2023 Member Survey Key Takeaways

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The results of the Member Survey, conducted in September every year, are incredibly important in underpinning our planning for the year ahead. Thanks once again to everyone who completed the survey.

This was the tenth consecutive year that QuantiFire was asked to collect and report feedback from the IR Society’s membership. Feedback from the membership is invaluable to the committees and management team of IR Society, as they plan the year ahead. Our research was conducted between 23rd August and 20th September 2023, and we obtained responses from 90 members of the Society (predominantly senior IROs). This report follows on from nine years of previous research and historical data has been included where possible.We hope that this summary of the findings will also be of interest to the wider IR community, for highlighting current themes, challenges and expectations for the year ahead.

IR Departments: Budget and Team Size

IR budgets continued to show a gentle upward trend in aggregate, with increases outweighing decreases. However, once again the majority of IROs reported that their budgets were unchanged from last year, despite inflationary pressures. IR teams are continuing to grow, but slightly slower than previously: 35% of respondents reported an increase in the size of their team in 2023, down from the 40% reported in 2022 (but up on the 30% in 2021).
As was the case last year, the factors which IROs expect to impact their programmes in the coming year over-whelmingly relate to macroeconomic conditions and recession risk.

IR Departments: Future IR Activity

The likelihood of spending more time on ESG programming has decreased slightly since last year and is now on par with more direct outreach to investors in terms of likely IR activity over the next twelve months. Continuing a trend observed last year, direct outreach has now overtaken the use of brokers. There is a degree of ‘belt-tightening’ observable in these results – most of the outcomes which require increased expenditure are now considered more unlikely in the coming year than was the case 12 months ago. Participants were also asked to outline their priority areas for investments in the coming year. Many of the responses refer to engaging with overseas investors to broaden the geographical mix. Numerous respondents are also planning a CMD in 2024.

The Sell Side

Over two-thirds of respondents have observed a change in the number of analysts covering their stock this year. Increases outweigh decreases, but this year’s results suggest more churn than previously. The two broker services which were rated highest last year – responsiveness to requests and overall quality of support to IR – recorded an improvement this year. Whereas the less highly rated services all fell slightly. Written observations on the sell side are again predominantly negative. IRs noted that they have to “spoon feed” information to their analysts. Several commented that the number of conferences has fallen.

The Buy Side

The spread of responses shows that management teams are more likely to have a clear preference for either in-person or virtual meetings, whereas investors are generally more agnostic. Connecting with new investors is the most challenging of the three core areas of IR activity, whereas scheduling meetings is not a problem. The importance of social media as a communication tool stayed at the slightly sub-neutral level recorded in 2022. However, for IROs with a meaningful number of retail investors, social media is an important tool. The importance of engaging with ESG focused investors has declined very slightly, which might be because these contacts are now ‘baked in’ to IR activity, or a reflection of shifts in the wider market. In terms of the amount of engagement with ESG specialists, most IROs did not observe a change. But a significant minority (30%) reported an increase in their direct interactions with governance / sustainability teams at their investor institutions.

Corporate Thoughts on Suppliers

In most areas, IROs' satisfaction with the quality of the services provided by their suppliers fell slightly from 2022, or was unchanged. The only area which recorded a satisfaction increase was webcasts, perhaps as suppliers perfect these technologies and the best practitioners emerge. Perhaps the most dramatic shift between 2021 and 2023 is the proportion of suppliers increasing their prices – up from 33% in 2021 to 71% in 2023. IROs have noticed some “interesting” AI services appearing on the market recently but there is no evidence of how useful they are proving to be at this point. The question about innovative services will be asked again next year, and it will be interesting to see how suppliers respond to IROs' curiosity in how AI might assist their programmes.

Supplier Thoughts on Corporates

Overall, suppliers observed a slight decline in the ‘willingness to spend’ amongst IR departments, perhaps reflecting the increased pricing observed above, combined with the static budgets described previously.
Similarly, the market has become fractionally more competitive for suppliers. Two thirds still expect to continue to grow their business in the coming year, but macroeconomic uncertainty is always a factor. Two new questions were put to suppliers this year. Interestingly, most suppliers find that traditional in-person events are the best way to engage prospective clients, followed by direct email campaigns. However, more than half of suppliers are at least “cautiously experimenting” with AI, of whom 30% said AI is becoming important, or is already important, to their business. This recognition that AI will become increasingly significant (to both suppliers and IROs) is reflected in respondents’ thoughts on what the IR Society should focus on in 2024.

The Year Ahead

For a second year, targeting the right institutional investors is expected to be the most important issue for IROs in the year ahead, with managing market guidance a close second. The importance ‘rating’ assigned to each of these has also increased since last year. Reflecting changes in the IR industry, three new categories were added to this question this year: the role / use of AI in IR, activism, and retail investors. Whilst these are regarded as relatively less important at present, changes will be tracked and reported in future Membership Surveys.

To find out more, members can download the Summary Report.

About QuantiFire

QuantiFire helps IROs to provide better service to investors and much better reporting to management. We do this by collecting and analysing response information from investors and analysts, as data and at scale.

Many companies struggle to identify 'new' investor names with a confirmed interest in meeting; QuantiFire's 'pre-engagement' interest research solves this problem. 'Post-engagement' we support clients with market-leading investor feedback and perception research solutions.

For investors, our service engages them as carefully targeted individuals using secure and innovative protocols that respect their time and privacy, whilst improving user experience.

For companies, we provide light-touch solutions that leverage technology at every stage, minimising hassle and maximising the quality of insights, delivered to a Board-ready standard.

Know what the market really thinks: www.quantifire.co.uk

Published 10 November, 2023