It’s not binary: acceleration of the trend to digital
These extraordinary times are also proving exceptionally busy for IR. Looking across all corporates on the ingage platform, which includes some 15% of FTSE 100 companies, the total number of investor engagements actually grew by 1.5% year-on-year in March 2020 - but with 55% of those meetings conducted remotely compared to 18% in the same period last year.
As companies contemplate results releases and roadshows over the second quarter, it’s clear they do currently face a binary choice in how to conduct those engagements with the capital markets community: do it virtually or not at all. How to go about organising those audio and video conference calls, and the potential pitfalls to avoid, was the focus of last week’s IR Society webinar, IR in a virtual age, with the London Stock Exchange, National Grid PLC and BRR Media joining us on the panel to share their experiences.
An inevitably Heath Robinson-esque response to the immediate requirement for new solutions has, in the short term at least, also brought more tolerance of technical glitches. Pixelated video, robotic audio and make-shift home working environments all part of a keep-calm-and-carry-on approach. It has also opened eyes to both the possibilities - and the limitations - of virtual meetings.
From a practical perspective, not having the home team in the same room makes things more difficult. Without eye contact it’s hard to co-ordinate who speaks when and to manage Q&A. More pre-call briefing is required and it’s critical to test the technology in advance.
Panellists stressed the importance of not overloading the schedule: 4-5 meetings a day, similar to a physical roadshow, is ideal. In lockdown life, most of us will have had family zoom calls – and perhaps been surprised how exhausting they are, and how hard it is to concentrate. Trevor Cox, Professor of Acoustic Engineering at the University of Salford, explains why: the stress and strain of concentrating on hearing what’s said over a poor quality audio connection which could cut out at any time. Charlotte Simon, Control Room Team Leader at BBC Radio, highlights significantly reduced audio frequency range over telephone or VOIP (typically 3.5 kHz) compared to live conversation (20 KHz) or broadcast lines (15 KHz) – making it harder for the listener to hear and decipher nuance and tone.
Technically, there are several issues to consider:
- quality of home broadband connections;
- video framing (eg a stable background to use less bandwidth and distract less from what’s being said);
- potential to pre-record and edit content;
- managing group meetings (6 max for video, written Q&A marshalled by IR is ideal);
- potential VC platform compatibility or IT security issues
More virtual meetings often means more arranged direct, putting further pressure on the IR team. Arranging direct meetings, confirming attendees, dial-in details and web links, calendar invitations, email confirmations and Outlook integration - all critical. In the absence of visual cues and body language, investor feedback becomes even more important, too. A state-of-the-art IR CRM solution can help with all this, doing a lot of the heavy lifting for an IR team, saving time, avoiding dropped balls, and delivering unique insight to IR and Management. But, as a vendor of such systems, of course I would say that...
The current pressures are in many ways overwhelming, both professionally and personally. But IR is in a position to play an important role helping management at a critical time – it’s a big opportunity and high visibility.
Right now this is a binary choice – it’s virtual or not at all – but this seems likely to change. Time will tell how much of the shift to digital proves sticky, but it does seem like we’re at something of a turning point. For maintenance or catch up meetings, where you already know the people you’re talking to, or to cover hard to access or secondary locations, it’s invaluable, and offers significant opportunity to work more efficiently, saving time, money and reducing the environmental impact. But in the leading financial centres, such as London and Edinburgh, it’s at least as easy – and delivers better results – to see people in person. Building relationships, and trust, takes time and is much easier to do face-to-face. A key component in how this market develops will be IR budgets – and whether any of the travel costs saved can be retained? If so, I’d expect to see more done virtually, and a portion of the savings to be spent on securing the right technology solutions to help companies cope. On a mid to long term view, it’s likely we’ll see virtual working hand in hand with physical for quite some time to come.
Michael Hufton is Founder and Managing Director of ingage IR LTD.
Published 21 April, 2020