INFORMED PROMOTING EXCELLENCE IN INVESTOR RELATIONS ISSUE 105 WINTER 2019/20 - Investor Relations Society
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CHAIR’S LETTER | INDUSTRY NEWS | PERSONAL VIEW | SERVICES DIRECTORY INFORMED PROMOTING EXCELLENCE IN INVESTOR RELATIONS ISSUE 105 WINTER 2019/20
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INVESTOR ANALYTICS
INFORMED WINTER 2019/20
CONTENTS
4 CHAIR’S LETTER
Looking ahead to a busy New Year
13 IR NOTEBOOK 2020
David Walker, chair, IR Society a special feature
5 NEWS FROM THE SOCIETY 13 IR 2020 – Looking back, looking forward
Walker steps up as Society chair Richard Davies, RD:IR
Davis to host conference 2020
A new policy head for the Society (p7) 15 Can you judge an annual report by its cover?
Breakfast briefing on activism (p7) Jarrad Comley, MerchantCantos
New IR Society members (p8) 18 How to stand out from the crowd in 2020
ESG developments (p10) Sandra Novakov, Citigate Dewe Rogerson
CIR and ICIR passes (p10)
20 How Severstal is putting its corporate purpose
into practice
6 PERSONAL VIEW Andrew Hayes, Hudson Sandler
Building the IR profession at home and overseas 23 Pay and performance top AGM themes in 2019
Laura Hayter, CEO, IR Society
Lisa Graham, Equiniti
24 Are companies reporting the climate change
8 FINAL THOUGHT information that investors need?
The Society is in good shape Stuart Lemmon, EcoAct
David Lloyd-Seed, outgoing chair, IR Society
26 Putting flesh on the bones of your corporate
culture
11 INDUSTRY NEWS Nick Bastin, Montfort
FRC publishes revised UK stewardship code
Selected key issues for IROs
29
36 PROFESSIONAL DEVELOPMENT
Courses (p36-39)
Certificate in Investor Relations (p40-41)
Diploma in Investor Relations (p42)
44 EVENTS
The IR Society events programme
45 IR SERVICE PROVIDERS DIRECTORY
Find help in this listing of IR service providers FULL REPORT WITH PHOTOS
W E WISH ALL OUR MEMBERS AND READERS
A M ERRY C HRISTMAS AND H APPY N EW Y EAR
IR SOCIETY 3
INFORMED
CHAIR’S LETTER
The Investor Relations Society
5th Floor, 30 Coleman Street,
London, EC2R 5AL
Tel: 020 7379 1763
Looking ahead to
a busy New Year
www.irsociety.org.uk
THE MANAGEMENT TEAM
Laura Hayter
CEO
laura.hayter@irsociety.org.uk
I took over as chair at the end of our board meeting in early December. The board always
uses the last meeting of the year to reflect on the last 12 months and this time it also
allowed us to take stock on the many things David Lloyd-Seed has achieved in his time in
Alina Ardeleanu the role. This has included the appointment of two CEOs to the Society, the successful
Financial controller
alina.ardeleanu@irsociety.org.uk
launch of the Diploma, and strengthening our CIR offering with further international
collaborations, to name just a few. I know David will remain engaged and supportive of
Robert Dann
Head of marketing and membership the Society in future, not least as a board member, and I thank him on behalf of the
robert.dann@irsociety.org.uk board, the executive team and all of our members for his significant contribution.
Kate Heseltine With these changes, and with Laura having recently taken over as CEO, we have a real
Head of policy and communications opportunity to look forward. We’ll focus on how we can effectively build on the strong
kate.heseltin@irsociety.org.uk
position the Society has established to help develop our profession and support our
Jessica Hyett members, old and new, from across the IR spectrum.
Professional development executive
jessica.hyett@irsociety.org.uk
Four points
Tara Mitchell
Professional development executive My firm belief is that there are four points to the IR compass, all of which are of equal
tara.mitchell@irsociety.org.uk importance to the profession and the Society. We need to ensure that we reflect all four in
Nicolle Oliver our activity, membership and board composition. One of these groups are the companies
Events manager – we must be and will remain focused on addressing the challenges and opportunities
nicolle.oliver@irsociety.org.uk
these members face as their role develops, expands and becomes more complex; it’s the
Rebecca White lifeblood of what we all do. Then there are the crucial group of businesses who focus on
Marketing and membership executive
rebecca.white@irsociety.org.uk providing IR-related advice and services. Many of you will work in, or run, these
organisations. They are a vital part of our industry and it’s crucial that the Society
continues to engage with them in an inclusive way, but also that our membership,
THE OFFICE HOLDERS committees and board reflects the massive contribution that they make.
David Walker There are two points to this IR compass, though, where I feel we could do more to
Chair engage. Firstly, investors and secondly, our brokers, analysts and advisers, as well as the
david.walker@britishland.com regulatory or industry bodies. Both are groups with whom, as regulation and complexity
Douglas Radcliffe increases, there is real mutual benefit in working together. We could and should do more,
Deputy chair and interim treasurer
douglas.radcliffe@finance.lloydsbanking.com
certainly in terms of bringing them into the Society as active members. So many people
have moved across from that side of things into IR roles within corporates, only to be
James Eves
Company secretary (pleasantly) surprised by the work the Society does. The onus is on us all to make sure our
james.eves@db.com investors, advisers and analysts have that awareness already – to do that, we need a
For a full list of the IR Society board and the constructive, ongoing and two way dialogue. This is something on which Laura, Douglas
committee chairs, see www.irsociety,org.uk. and I, with your support, will be very focused.
A 40th anniversary
INFORMED Next year will be the 40th anniversary for the Society. As someone who turned 40 myself
John Thistlethwaite last year, I know this is a milestone for us to reflect, celebrate and, most importantly, look
Production manager ahead. Unlike me, though, the Society has never been fitter or stronger as it moves into
john@silverdart.co.uk
its fifth decade and Laura, Douglas and I are already hard at work to establish our plan to
Alex Murray
Publisher
take the Society forward. As we do this, we’d love to hear your thoughts and welcome
amurray@silverdart.co.uk your help. If you have any ideas, or think you can help in any way (big or small), please
Informed is published on behalf of the don’t hesitate to get in touch.
IR Society by Silverdart Publishing In the meantime, I wish you all a very happy and restful Christmas and all the best for
Tel: +44 (0)1285 831 789 what should be a fascinating and busy 2020. ■
www.silverdart.co.uk
Editorial enquiries can be addressed either to
Laura Hayter or to Alex Murray.
Views expressed in this publication are not
necessarily those of the Society.
© 2019 IR Society DAVID WALKER
4 IR SOCIETY
WINTER 2019/20 SOCIETY NEWS
Walker steps up Davis to host conference 2020
as Society chair Evan Davis, the BBC broadcaster and
David Walker, head of IR at British Land, journalist, has confirmed that he will be
became IR Society chair this month after joining the IR Society’s members and guests
David Lloyd-Seed stepped down. David for the 8th year as moderator at the Society’s
Walker has served on the board of the IR annual conference in 2020.
Society since 2012 and was deputy chair The conference will take place on 23 June
from 2016 until now. Douglas Radcliffe, 2020 at Kings Place, London. Full details of
group IR director at Lloyds Banking the conference will be revealed on the
Group, is now deputy chair. Society website soon, so keep an eye out
David qualified as a chartered and make sure to save the date!
accountant with PwC in London before Since autumn 2018, Davis has been the Evan Davis
spending over seven years at Deutsche lead presenter of the PM evening news
Bank in various roles within the corporate programme on BBC Radio 4. He also programme in 2008, before moving on to be
finance division, including in business presents Dragons' Den on BBC Two and the the main presenter of BBC Two’s Newsnight
development and as a vice president in weekly The Bottom Line business discussion between 2014 and 2018. He previously
the UK corporate broking team. programme on Radio 4. Having been worked as an economist at the Institute of
Subsequently, David worked for seven appointed the BBC’s economics editor in Fiscal Studies and the London Business
years at Hays PLC, the FTSE 250 listed 2001, he became a presenter on the Today School. ■
specialist recruitment group, where he
headed up the IR and corporate
development team. In October 2017 he 2020 IS THE IR SOCIETY’S 40TH ANNIVERSARY YEAR!
joined British Land, the FTSE 100 real
estate company, as head of IR. ■ WE WILL BE CELEBRATING THIS IN VARIOUS WAYS – WATCH THIS SPACE!
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PERSONAL VIEW INFORMED
Building the IR profession
at home and overseas
In her first Personal View column since taking over as CEO of the
Society, Laura Hayter outlines her priorities in the year ahead.
I take over the reins at an exciting time
for the IR profession, and with the
changing dynamics in the capital
dinner – and I’d like to thank my dedicated
executive team, Rob, Alina, Tara, Jess,
Nicolle and Rebecca, who have yet again Laura Hayter is CEO of the
markets, regulatory change and the delivered all of this for our members in IR Society.
increasing demands from responsible 2019. In November we were also joined laura.hayter@irsociety.org.uk
investors, now has never been more by a new team member, Kate Heseltine
important for the role of IR to shine and who will continue the good work in policy
to continue to push the boundaries in best (see opposite). CIR programme
practice IR. As a Society we’re here to help every Continuing professional development is key
The Society exists for two main reasons – single one of you in your careers, through to the IR role as it grows in stature and
to champion you, our members, and the our wide range of professional professionalism, and in January 2020 we will
fantastic work you are all doing in raising development courses for IR professionals at be launching our updated CIR and ICIR
the standards in IR, developing best any stage of their career, and suite of IR study guides. A huge thank you to Ross
practice and driving professionalism within qualifications. Hawley, chair of our education committee,
the sector. And second, to raise the profile We will also help you keep up-to-date our examinations committee and other
of IR more generally – act as the focal through the work of our excellent policy Society volunteers who have generously
point for issuers and investors, and to committee, our regular communications given their time to revise and update the
represent your views to regulators, the and best practice guidelines. You can see study guide content. We are also very
government and the wider investment what‘s coming up in Informed and on the grateful for the support of our all our CIR
community. website. partners who continue to deliver the CIR
overseas, and to date we have over 1,600
An active year A full events programme CIR passes in the UK and beyond. We look
It’s been another busy year for the Society I would encourage each and every one of forward to welcoming new international
– more than 25 events, four issues of you to attend at least one our IR Society collaborations in 2020.
Informed, 37 courses with more than 350 events in the next three months. For those
attendees, 250 CIR and diploma of you that regularly attend our events, you Change at the top
candidates, and of course our annual know what to expect, and for those of you Finally, I’d like to thank David Lloyd-Seed for
conference and best practice awards have haven’t been for a while, come and his service and commitment as chair of the
see what you’ve been missing, I guarantee Society board over the last three and a half
you won’t be disappointed! years. He has given a huge amount of his
Plans for 2020 are gathering pace as we time and support to me and the team here at
continue to broaden our offering to both Coleman Street. A true champion of IR,
‘ Look
our existing and new members across all David remains on the board and will
markets and sizes. We already have a full continue to support the Society through the
out for some events programme scheduled for next year, many events we have planned for the future.
and we’re also looking to deliver more A big welcome to David Walker into the
special events we events to our members outside of London, role of chair. David brings with him a wealth
in the UK regional hubs. First stop of experience and is currently head of IR at
have planned for our Manchester in February.
2020 also marks the 40th birthday for
British Land. I look forward to working with
him, our new deputy chair, Douglas
40th anniversary in the IR Society, and we will be proudly Radcliffe from Lloyds Banking Group and
’
celebrating our achievements in a number the rest of the board as we continue to
of ways throughout the year, so stay tuned promote excellence in the IR profession.
2020 for some special events we have planned. Finally, all that remains for me is to wish
We will be shortly be rolling out our new you a very happy Christmas, and much
Fellowship programme and look out for health and happiness for the New Year, and I
our special collection of 40 IR interviews look forward to seeing you in the course of
at 40 throughout Informed next year. 2020. ■
6 IR SOCIETY
WINTER 2019/20 SOCIETY NEWS
A new policy head for the Society
Kate Heseltine, who joined the Coleman Street team in November,
introduces herself to members and Informed readers.
I am delighted to have joined Laura and voice of our members during periods of
the executive team as the head of policy consultation.
and communications. This is a I am a chartered accountant and have
particularly exciting time to be taking up broad experience across equity capital
this role, given the sea change in the markets, having previously led investor
regulatory landscape and the greater relations for a FTSE real estate investment
demands being placed on listed trust and worked as a sell-side equity
companies. research analyst covering the retail sector. Kate Heseltine
Over the coming months I look forward My ACA qualification was gained with kate.heseltine@irsociety.org.uk
to meeting many more of our members, the insurance and investment management
helping to shape the IR Society’s views on team at PwC after graduating from two young children. I enjoy running and
developments in policy and best practice university with an MSc in finance. Outside recently completed my third half-
investor relations, and representing the of work, much of my time is focused on my marathon, raising money for Macmillan. ■
EVENT REPORT Breakfast briefing on activism
The IR Society was delighted to be hosted
by Georgeson on 13 November for a
breakfast panel and Q&A session on
activism. The event was moderated by
Anthony Kluk, head of the Nordic region at
Georgeson, with Nick de Bunsen, director
at Teneo, and Michael Henson, an
independent investor relations consultant,
contributing to an active and informative
discussion as guest speakers. The key
takeaways were as follows:
• Institutional investors are becoming more
actively involved in discussions on
strategy and governance.
• Most activists dislike public battles, which and companies are, in turn, responding to structured programme of investor
can be distracting and expensive for all ensure their own approach stands up to engagement around governance issues)
involved, but instead prefer to drive scrutiny. and be prepared to potentially fight a
change behind the scenes. There is a huge • There has also been a rise in M&A proxy vote from the moment an activist
undercurrent of activism that does not activism. Corporates must clearly approaches the company or enters the
make the press. communicate their strategy and share register.
• Activists typically come onto a share demonstrate consistency in delivering • It was asked at what stage should an IRO
register because they see value enhancing against it. It is important for corporates to escalate an activist approach to executive
opportunities and governance failings that understand the views and investment management. A first step before involving
can be addressed. Activists are likely to objectives of their top holders by engaging the board may be to set up a meeting
approach other key holders to put on a regular basis. A lack of consultation between the activist, IRO and CFO to
pressure on the company to enact change. with holders can prove disastrous. gauge intentions. When the CEO becomes
• On ESG, the panel agreed that mainstream • Companies must take a measured involved in meetings, the approach should
institutional holders are increasingly approach and engage openly in the early be escalated to the board.
feeling forced to become vocal on stages of an activist approach, rather than • Looking ahead, as many companies
governance issues whilst environmental view it as a personal attack on approach the three-year binding vote on
and social activism is also on the rise. management. remuneration policy in 2020, we are likely
There has been considerable recent • Boards should be thinking strategically, to see increased investor activity and
change in the level of interest in ‘ES’ issues have a clear plan of action (including a engagement on the issue. ■
IR SOCIETY 7
FINAL THOUGHT INFORMED
The Society is in good shape
The outgoing chair of the IR Society David Lloyd-Seed commends the ‘best in
class’ of the best practice award-winners and pays tribute to the Society team.
C ongratulations to all the winners at
this year’s star-studded awards dinner.
It’s great to see so many companies
clearly bringing the best out of
companies as the most prestigious IR
awards around. David Lloyd-Seed is the outgoing
demonstrating how to deliver best in chair of the IR Society.
class IR. While it’s a mammoth The passing of the baton david.lloyd-seed@irsociety.org.uk
commitment I thoroughly enjoy the As I pass the baton of chair on, this will
review process for the judged awards. In be my last article for Informed. It has
particular, I enjoy hearing the views and been an honour and a privilege to serve small cap offering. Leveraging your
thoughts of our august judging panel. the Society in this capacity over the last membership is of course the best way to
These range from individuals representing three and half years. I am delighted to network, learn and share.
professional bodies, advisers and hand over to David Walker who I know There has been much change in the
investors to ESG specialists. will do a fantastic job in taking the excellent executive team at Coleman
Their views really do reinforce the Society through its next phase. Street and I can safely say that we now
importance of a company having a I am delighted to be able to say that have the best team to take the Society
clearly articulated business model and your Society is in a fantastic place to forward. We have an incredibly strong
joined up strategic narrative that works support you as our industry continues to and supportive board and we have
across all communications channels as professionalise. We have a brilliant rebalanced the relationship between the
well as for all stakeholders. education pathway that supports board and the executive to enable both
A common theme again this year was members from the beginning of their to be more effective in their roles also to
that the FTSE250 companies led the way careers in IR right through to being reflect best practice corporate
in terms of better disclosure and leaders in their companies. Our CIR is governance.
communications practices versus recognised across the world as the best IR With the 40th anniversary of the
FTSE100 companies. Maybe it’s the qualification, bar none. society next year we are in a great place
complexities of scale combined with the Our qualification programme and the in a wonderful and growing industry,
burden of increasingly onerous disclosure important voice that the Society holds ready for the next 40.
requirements that makes it harder for means that there is a clear pathway to It just leaves me to say thank you.
large caps to really break new ground in creating a professionally recognised Thank you to the hard work and support
best practice. industry, one from which we can all of the executive team and my fellow
But overall the standards continue to derive accreditation to support career board members and of course to our
rise each year and investors on our development and recognition. We are great membership. But most of all thank
panels appreciate the progress being continuously improving the services that you for allowing me to serve as chair for
made. Our best practice awards are we offer, including an evolving bespoke this great Society and industry of ours. ■
NEW IR SOCIETY MEMBERS – October to December 2019
The IR Society is pleased to welcome the Phil Courtney – Global Fashion Group Jonathon McManus – Foresight Group
following new members, who joined in Amal Dahoum – RD:IR Anne Melbourne – Alliance Pharma
October to December 2019. For David Farrell – Credit Suisse Dr Ravish Mohammad Hussain Tatli –
membership enquiries, contact Luca Gagliardi – M&G United International Transportation
robert.dann@irsociety.org.uk or Marion Genais – Independent Company
call +44 (0) 20 7379 1763. Spencer Horgan – M&G Jean O’Donnell – Applegreen
Daisy Jones – RD:IR Lynette Otiti – Dialog Semiconductor
Maria Baines – M&G Lawrence Kibet – Image Registrars Faye Procter – Tesco
George Caine – TUI Group Mitesh Kotecha – Independent Amber Sekhri – RBS
Andrew Carter – Rotork Emiljana Krali – VertoFX Daniel Somoza – Invicomm
Nicola Caverzan – M&G Caroline Lakey – Independent Rupert Taylor Rea – RSA
Hannah Chambers – Marks and Spencer Shaun Laubscher – Spirax-Sarco Dirk Vermehren – Orient Capital
Nick Commandeur – Croda International Engineering Lawrence Williams – Tesco
Ayomide Condotti – Uthande Global Darice Liu – Universal Display Corporation Jonathan Yarr – Petrofac
8 IR SOCIETY
Deutsche Bank Corporate Bank We’re not just a depositary bank. We’re helping companies raise
SOCIETY NEWS INFORMED
ESG – IROs call for disclosure Global ESG survey of buy side
The IR Society is currently conducting a
global survey of the buy side, in partnership
With the rising interest in ESG, the IR creation, with only 13% of respondents with QuantiFire, around their approach to
Society recently conducted a short survey having fully incorporated ESG factors ESG research and engagement. We expect to
of its IRO members asking for views into their investment story. publish these results in early 2020.
around current ESG reporting practices. • Despite the increasing number of rating
The key findings were: agency surveys and requests for ESG ESG data – mind the gap
disclosure, 41% of IROs surveyed have The IR Society recently partnered with
• Survey participants overwhelming agreed not yet discussed the analysis process Responsible Investor to host a webinar
there is a need to improve disclosure with their top investors. discussing the different views of companies,
around ESG communication in the next • Almost half of the respondents have not investors and industry practitioners regarding
one to three years. incorporated investor views into an ESG ESG data quality, consistency and accuracy.
• Respondents consider a wide range of materiality assessment process. During the session, CEO Laura Hayter
ESG metrics, however, there is a strong • A small proportion of the IR Society provided insights into the key findings and
focus on environmental factors rather small-cap membership responded, views from our recent IR Society ESG survey.
than governance factors. suggesting they are not ready or The webinar is available online at
• It is still a work in progress for sufficiently resourced to consider their www.responsible-investor.com/webinars/
companies to articulate long-term value approach to ESG within IR. esg-data-mind-the-gap-part-1 ■
CIR and ICIR PASSES – September to November 2019
The IR Society congratulates the following Sandra Grace Benny – IRPAS Sarah McKenzie – Britvic
candidates who passed the CIR® or ICIR® Kainoa Blaisdell – IRPAS Marlin Medina – IRPAS
from September to November 2019. Sebastien Bland – Citigroup Ali Tarek Mourad – Qatar General
Tom Blundell – Tulchan Communications Insurance & Reinsurance
Redha A Alamri – MEIRA Group Yeoh Hong Nam – IRPAS
Abdulla Jaber Al-Athbi – QNB Fiona Blythe – Independent Surya Narayanan – Qatar Industrial
Mai Al Baroudi – Qatari German for Dece Claverie – MEIRA Manufacturing Company
Medical Devices Abigail Cohen – Investec Bank Hicham Nedjari – Gulf Warehousing
Fahad Al Besher – MEIRA Hal Cullity – InfraRed Capital Partners Zaggie Ng – IRPAS
Omar Ali Aldalaan – MEIRA Selam-Maya Demeke – Independent Marta Parry-Jones – Tulchan
Iyad Al Garawi – MEIRA Consultant Communications Group
Abobaker Ahmed Al-khateeb – MEIRA Sophie Duckworth – Tulchan Nicole Paxton – Anderson Hoare
Gaylene Allen – MEIRA Communications Group Emma Simo Pinatella – MEIRA
Talal Riad Almoallem – MEIRA Mohammed El Sadi – Dlala Holding Geraldine Poindron – Advanced
Samah Basel Al Moghrabi – Milaha Matthew Evans – Tullow Oil Oncotherapy
Mohammed Mostafa Al Qadi – Mazaya Ellen Freeth – Just Eat Ahmed O. Sager – Saudi Stock Exchange
Real Estate Company Ekaterina Gorelikova – J.P. Morgan Diala Saliba – Qatari Investors Group
Nasser Al-Qunaiah – MEIRA Cazenove Zaid Shelleh – Aamal
Qutaiba AlRabe – MEIRA David Green – Caxton Asset Management Kelly Shia – IRPAS
Yanal Refaat Alsaad – Commercial Bank of Georgina Griffin – Shawbrook Bank Dr Ravish Mohammed Hussain Tatli –
Qatar Rob Gurner – Inmarsat Unitrans (BudgetSaudi) Saudi Arabia
Sara Al Sayed – Ooredoo Joseph Hanson – MEIRA Atarah Taylor – Kennedy Wilson
Ammar M Al-Shamrani – MEIRA Ross Hawley – Independent Victoria Walsh – Taylor Wimpey
Abdulrahman Abdulaziz AlShaye – MEIRA Tianning He – IRPAS Chai Hung Yin – IRPAS
Eyad Abdulaziz Al Shobaian – MEIRA Rebecca Hislaire – Teneo Fotios Zeritis – Qatar Gas Transport
Hamad Al-Yacoub – Ahli Bank Ahmad Irshaid – Baladna Food Industries Company Ltd (NAKILAT)
Walid Ibrahim Abu Arjah – Qatar Islamic Harriet Jackson – Yellow Jersey PR
Insurance Zameel Ammanoor Kasim – MEIRA
Eliane Abou Atmeh – Al Khaliji Muhammad Durraiz Khan – QNB
Commercial Bank Koh Shu Min Samantha – IRPAS For more information about the
Hakeem Tunji Balogun – Independent Jacinta Kong – IRPAS CIR and ICIR, including course
Sandro Barbato – Morrow Sodali Neeraj Kumar – MEIRA dates, please see pages 48-49,
Misha Bayliss – Tulchan Communications Caroline Lakey – Financial translator
Group Justin Lau – IRPAS
or contact Tara Mitchell at
Asmaa Ibrahim Othman Belal – Sophia Martin-Pavlou – Tulchan tara.mitchell@irsociety.org.uk
Investment Holding Group Communications Group
10 IR SOCIETYWINTER 2019/20 INDUSTRY NEWS
FRC publishes revised UK
stewardship code
In October, the Financial Reporting 2020. Organisations wishing to become
Council (FRC) published the UK signatories must produce an annual
Stewardship Code 2020, following a stewardship report explaining how they
consultation which received many have applied the code in the past 12
responses from a range of stakeholders, months, with submissions for the first list of
including the IR Society. The revised code, signatories due to the FRC by 31 March
which is voluntary, sets high expectations 2021. For a full copy of the UK
for investor stewardship, with the Stewardship Code 2020, visit
overarching aim of creating long-term www.frc.org.uk. Industry news briefing:
value for clients and beneficiaries, and Selected key issues for IROs
delivering sustainable benefits for the IA launches framework for
economy, the environment, and society. It
responsible investment
comprises 12 ‘apply and explain’ principles early November, in support of the
for asset owners and asset managers and Reflecting the growing importance of ESG, shortening of market opening hours to
six further principles for service providers. the Investment Association (IA) launched its 9am – 4pm (currently 8am – 4.30pm)
The IR Society welcomes the publication Responsible Investment Framework in GMT.
of the revised code, which places a greater November. The framework and its European trading hours are among the
focus on environmental, social and supplementary definitions aim to bring longest in the world and it is suggested
governance (ESG) issues while aiming to be clarity and consistency to the way its that this 90-minute reduction will improve
tougher and more aligned with the members describe their products, in order market efficiency by concentrating
Corporate Governance Code. Among key to help beneficiaries to understand and liquidity and allowing traders more time
changes, the code now requires signatories assess how ESG is being integrated into the to digest corporate news flow. Importantly,
to take ESG factors into account and to investment process. it is also expected to promote a better
ensure their investment decisions are The IA framework can be applied both at work-life balance and encourage greater
aligned with the needs of their clients. firm and fund-level and is intended to diversity within the industry.
Signatories must also explain their support the promotion and development of The LSE has responded by stating that it
organisation’s purpose, investment beliefs, responsible investment in the UK. intends to open a formal consultation to
culture and strategy and how these enable review its trading hours, for which the
them to practice stewardship. The scope of Shorter EU market hours Society will be keen to put forward the
the code has been extended to include asset views of its members. ■
proposed
owners and service providers, in addition to
asset managers, and covers all asset classes, The Association for Financial Markets in
not just equities. Europe (AFME) and the IA delivered a joint Keep up to date with the
The code takes effect for reporting letter to the London Stock Exchange (LSE)
periods beginning on or after 1 January and other European trading venues in latest industry news with
the IR Society’s weekly
e-Bulletin. It’s free to all –
Welcome to The Impact Investing Institute just register. You can find
Members of the IR Society’s policy Peter Harrison, chief executive of details on our website –
committee attended the recent launch Schroders and chair of the Investment www.irsociety.org.uk
event for the Impact Investing Institute, Association, and Sarah Gordon, chief
which aims to promote the growth and executive of the Impact Investing
effectiveness of the UK as a leader in this Institute.
field. This new independent, non-profit Together, they outlined plans to make it
organisation brings together the UK easier for large pools of capital, such as
National Advisory Board on impact pension funds, to invest for positive
investing and the Implementation impact and to bridge the gap between the
Taskforce for Growing a Culture of Social City and the social sector, and in doing so
Impact Investing in the UK. The event giving people the ability to save and
was well attended with speeches from invest in line with their personal values.
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issuerservices@lseg.com www.lsegissuerservices.comWINTER 2019/20 IR NOTEBOOK 2020
IR 13 IR 2020 – Looking back, looking forward
NOTEBOOK 15 Can you judge an annual report by its cover?
2020 18 How to stand out from the crowd in 2020
20 How Severstal is putting its corporate purpose into practice
a special feature 23 Pay and performance top AGM themes in 2019
focusing on several
hot topics in investor 24 Are companies reporting the climate change information
relations in the year that investors need?
ahead
26 Putting flesh on the bones of your corporate culture
IR 2020 – looking back, looking forward
From the clay tablet in ancient Iraq to the digital tablet of today, the ‘persuasion’ industry has honed
its skills to an impressive degree, but the underlying work remains the same, writes Richard Davies.
A s we face the start of a new decade, and
the 40th anniversary next year of the
founding of the IR Society, I thought it
unsurprisingly, the public relations industry.
PR has its own very long history – some
scholars argue that a clay tablet found in
LOOK BACK, FORWARD
• Investor relations developed in the
appropriate to take stock of our industry and ancient Iraq that promoted more advanced US from public relations, whose
think about how we got here. agricultural techniques is considered the origins go back centuries.
Investor relations has a long track history first known example of public relations. • The major shift from retail to
which began in the US and spun out of, After that, all major civilisations have institutional investors in the 1960s
examples of artefacts or strategies designed and 1970s created a new layer of
to influence people – and in more modern communications function.
times, even the Boston Tea Party has been • We are still trying to influence
described as one of the more notable PR people to modify their behaviour, but
events. now through digital media.
The first example of public relations being
used in the pursuance of capital raising took
place in the 1860s when the major railway defended in the press the reputations of
companies building the Transcontinental companies.
Railroad engaged in a systematic corporate The Publicity Bureau was arguably the
public relations strategy in order to raise the first PR agency, founded by former Boston
$125 million needed to construct the 1,776- journalists, including Ivy Ledbetter Lee,
mile-long railroad. The point of the strategy sometimes called the father of PR. In 1906,
was to maintain an image attractive to Lee published a Declaration of Principles,
potential bond buyers and to maintain good which said that PR work should be done in
relationships with members of Congress and the open, should be accurate and cover
the California state legislature, federal topics of public interest. Ivy Lee is credited
regulators, workers and journalists. with developing the modern press release
Richard Davies is founder and It was, however, at the beginning of the and the ‘two-way-street’ philosophy of both
managing director of RD:IR. twentieth century that the first companies listening to and communicating with the
richard.davies@rdir.com started offering specific services that public. It was from this time that companies
IR SOCIETY 13IR NOTEBOOK 2020 INFORMED
‘Despite
started to pay journalists to present them in a set up to enforce the 1933 Act and it largely
good light.
The rise in the use by companies of
the succeeded in bringing back integrity to a
market wracked by scandals and corruption.
journalists to sway opinion brought about a
need among investors to receive more
increasingly surreal The term ‘investor relations’ was first
coined in 1953 by General Electric (GE), one
independent information, particularly about of the biggest American companies, when
the many major bond issuances of the time. nature of our modern GE started a programme that aimed at
Arise, the credit rating agency and the attracting individual investors to invest in the
financial data provider. environment, the company’s shares thanks to a specific
communication strategy. However, there
Rating agencies fundamentals of were professionals employed within
Credit rating agencies originated in the businesses before that date who were
United States in the early 1900s. The
construction of extensive railroad systems
communication in engaged in the management of investors,
alongside colleagues involved in dealing
had led to the development of corporate
our industry have not with the press, but GE is widely held to have
’
bond issues to finance them, and therefore a run the first IR strategy.
bond market several times larger than in
other countries. The bond markets in the changed IR in the US really took off in the 1960s,
but it garnered a questionable reputation as
Netherlands and Britain had been being a sales function for the corporation’s
established for longer but these tended to be capital, aided and abetted by ‘conniving’
smaller in comparison with the US and more analysts. It would take some years and a
related to debt raised by sovereign significant amount of legislation for IR in the
governments which were deemed more US to achieve the more noble status that the
trustworthy in terms of paying back their and it also began to use a letter-based system profession enjoys in the UK.
debts. for its rating. Poor's Publishing Company The origins of the IR industry in the UK are
One of the first financial data companies began issuing ratings in 1916, Standard more obscure, partly because of the use of
in the world was that of the publisher, Henry Statistics Company in 1922 and the Fitch terminology. The major shift from retail to
Varnum Poor, who produced a publication Publishing Company in 1924 – the modern institutional investors in the 1960s and
compiling financial data about the railroad era of credit rating had begun. 1970s created a new layer of
and canal industries. After the financial crisis communications function within
of 1907, demand rose sharply for Bringing back integrity corporations to deal with the burgeoning
independent market information, One further important historical event that audiences of asset managers and sell-side
particularly for analysis of bond shaped our industry is the creation of the US analysts. These professionals worked in
creditworthiness. Securities and Exchange Commission (SEC) departments called ‘shareholder relations’ or
Financial analyst John Moody issued a in 1934 as part of the Securities Exchange ‘corporate affairs’ – the activities of which
publication in 1909 focused solely on Act of the same year, an important piece of were what we now understand to be the
railroad bonds. His ratings became the first the New Deal legislation of President basic functions of IR.
to be published widely and his company Franklin D. Roosevelt. The previous year had Despite the UK IR Society being set up (in
was the first to charge subscription fees to seen a ground-breaking piece of law that a rather avant-garde manner, one could
investors, the model for the credit rating sought to increase public trust in capital argue) in 1980 by members drawn from in-
agencies of today. markets by requiring uniform disclosure of house and consultancy, it would take
Moody's carried out two major changes to information about public securities – The another decade before it became
its analysis in 1913. The firm expanded its Securities Act of 1933, also known as ‘The commonplace for companies (and then only
focus to include industrial firms and utilities, Truth in Securities Act’. The commission was large-cap companies) to run a dedicated IR
department.
Be different from the rest
FTSE 100 companies
As we enter a new decade and look forward
to the challenges of the IR of the future, we
Obtaining the Diploma in Investor Relations – the senior level can take comfort that despite the
qualification from the IR Society – will demonstrate a significant degree of increasingly surreal nature of our modern
expertise in IR along with the broader skillset required to perform the role environment, the fundamentals of
at the highest level. communication in our industry have not
changed. We are still trying to influence
To learn more, contact Tara Mitchell people to modify their behaviour, but now
at tara.mitchell@irsociety.org.uk or we do this through digital media, albeit with
call +44 (0)20 7379 1763 higher standards of probity around content.
The clay tablet is now a computer screen.
irsociety.org.uk/professional-development/diploma-in-ir I wish you a very merry Christmas and a
healthy and prosperous 2020. ■
14 IR SOCIETYWINTER 2019/20 IR NOTEBOOK 2020
Can you judge an annual
report by its cover?
The cover of your annual report can be a vital part of your communication effort. Jarrad Comley
surveyed all FTSE 100 and 250 reports to discover how IROs are approaching this mission.
T he clock is ticking down to the
introduction of the EU’s latest directive,
which will see the Single Electronic Format
statement? Do they introduce their purpose
in the opening pages, rather than embedded
into the statements? And finally, how many
ANNUAL REPORT COVERS
• With EU-driven changes coming in
begin to take effect in January 2020. It reports still use photography? annual report regulation, IROs need
heralds a big change in the annual reporting to consider their report designs.
landscape and I’m really interested in one FTSE 100 companies • 72% of FTSE 100 companies put a
potential side effect – whether reports will Amongst the FTSE 100, 72% of companies message on their report covers,
become less communicative. put a message on their cover, whether it be compared with 57% of FTSE 250.
My approach was simple. Download about brand or performance. Of these 72 • The cover is prime real estate for
every report from the FTSE 100 and FTSE companies, 67 are using what I categorised capturing attention and setting the
250 and ask one question of each – does it as a branded theme. Things like EasyJet’s tone of the report.
have a message on the cover? If yes, is it a ‘The warmest welcome in the sky’ or
branded message or a performance Inmarsat’s ‘Enabling Connectivity’. These
message? statements talk to the value of the company’s
To clarify my categories: a ‘branded long-term brand strategy rather than last
message’ is a phrase used in their brand, an year’s historic performance. I think that 67% company’s long-term strategy rather than a
extension of a campaign message, a is significant. It says to me that companies snapshot of 2018. Having worked with
description of the business, or a company want their stakeholders to think of them not clients to develop cover themes I also
tagline. In contrast, a ‘performance message’ only in the context of their numbers but as a suspect that accurately reducing the
is one that directly speaks to the contents of brand, with a vision. complexities of an entire year into a pithy
the report, acting as a summary of the year. Only five companies opted to use their phrase is no longer worth the effort. It may
As I had gone to the effort to download cover to describe the performance of the also be the evolution in best practice
350 annual reports, I thought I’d also look year which is an extremely small number reporting to recognise the needs of broader
for a few more indicators. Do they continue given the report is essentially all about stakeholders – specifically non-financial
the cover message inside the report and use performance, but understandable if the audiences.
it as a structure, essentially proving the cover document is seen as a record against the One indicator suggesting reports are
already beginning to focus on compliance
rather than a bespoke investment story is
demonstrated by the fact that only 19 reports
‘Only
in the FTSE 100 set out a theme on the cover
and used it to frame the story inside the
five FTSE 100 report. Severn Trent’s ‘Wonderful on tap’
theme was one of the few reports where the
companies opted to title continued inside the book, establishing
a framework to describe performance.
use their cover to Another was Ocado who used the cover line
‘Changing the way the world shops’ to
describe the explain their ‘Now is our time’ performance
summary.
Once considered best practice in
performance of
’
communicating a joined-up story, it now
seems that narrative reporting, in an
the year editorial storytelling sense, is an investment
few companies want to make. Interestingly,
Jarrad Comley is partner and even if 81% didn’t tell a themed story,
executive creative director at imagery was still seen as an important
MerchantCantos. feature to illustrate the business and add
jcomley@merchantcantos.com some additional visual stimulation. 90% of
IR SOCIETY 15IR NOTEBOOK 2020 INFORMED
‘The
the FTSE 100 still use imagery, which means their covers (versus 5% in the FTSE 100).
text-only reports remained very much in the This may be another sign that the FTSE 250
minority in 2018. prefer to use the report for its original decreased uses of
Finally, just 15 reports made any mention purpose – talking about the year’s
of their purpose in the opening pages. A
handful spoke about it later in their reports,
achievements. Another interpretation would
be that there’s simply a lag in approach
themes, imagery and
but I wanted to see who was using it as a
leading message. It will be interesting to see
between the two indexes. However, digging
a little bit deeper we see that only 4% of
purpose challenges
how this number changes next year given the
rise of ‘purpose’ on the corporate agenda.
FTSE 250 reports set out a theme on the
cover and follow it through into the report as the assumption that
a structural messaging device. That’s an
FTSE 250 companies incredibly low figure and may also be a the FTSE 250 use
So, how different is the picture amongst reflection of lower budgets and less internal
their report for
’
FTSE 250 reports? There’s an old assumption resource. Something all agencies know all
that their reports tend to be more too much about.
communicative, with businesses using the Looking at uses of imagery and purpose broader marketing
document as a broader marketing tool as we see that 69% of the FTSE 250 feature
much as a record of the year. But is that imagery (lower than the FTSE 100 at 90%)
really the case? and mentions of purpose also came in lower
This year, we saw 43% (108 reports) of at 10% with only 26 reports mentioning it in
FTSE 250 companies declining to put any the front of their reports. So, if we think
messaging on the cover (compared to 28% about the decreased uses of themes, imagery FTSE 350 front covers reference
of the FTSE 100). That’s a pretty big and purpose, it again challenges that performance. On the other hand, if you
proportion, although it’s slightly skewed by assumption that the FTSE 250 use their want the cover to explain what a company
the number of funds that sit in the FTSE 250 report for broader marketing uses. The actually does then most do that job
who generally use a templated design exceptions being Derwent London, who reasonably well simply through the use of
approach – in 2018 they accounted for clearly see their report as a key document to imagery.
around 28 reports (11%). explain the unique value of their business, Some may say that trying to judge any
Some 40% of FTSE 250 reports feature a and Pets at Home who brilliantly leverage book by one single page is a ridiculous
branded message on their cover. That’s a the personality of their brand. Of my list of exercise in the first place, but those who do
significantly lower proportion compared to leading FTSE 250 reports, many are commit to an idea on the cover set an
the FTSE 100 (where 67% feature a branded businesses who physically make things, not expectation about its contents. Specifically,
cover message). While 40% is still a decent just profits, so may still use this budget to that a company knows itself and
proportion, it’s perhaps an indication that update the image library. understands the journey they’re on. More
companies in this index aren’t actually using practically, it’s prime real estate for capturing
the report for general marketing purposes as FTSE 350 as a whole attention and setting the tone of the report…
assumed. Or maybe it’s simply down to the Let’s make some overall observations so companies shouldn’t waste this space.
fact that FTSE 250 brands aren’t quite as well looking at the FTSE 350 as a whole. It’s pretty safe to say that the reporting
established. To look at the FTSE 350 as a group and landscape is continually evolving but it feels
Some 17% of FTSE 250 companies opted summarise I see a couple of key factors: like most reports sit in one of three distinct
to use a performance related message on firstly, very few companies commit to a camps.
performance statement on the cover which is Firstly, there is a very small, elite group at
interesting given these are documents that the top who are still committed to telling a
are all about performance and almost half of coherent and connected story through
‘Reports
the FTSE 350 are using a brand-style concept, content and design. I counted 10
message instead. This may be more a sign of reports in the FTSE 100 that I thought were
may possibly apathy, than seeing the report as a key piece
of brand communications. The other notable
truly excellent examples of this, the FTSE
250 had 26. Strangely this is identical at
factor is that 40% have no message on the 10%. In the middle is a group who have
become more cover. This is a pretty big number and pared back their books and focused less on
potentially a sign of things to come as storytelling and more on charts and graphs.
compliant, more text- reports possibly become more compliant, These books are generally well designed, but
more text-heavy and probably more you have to spend more time with them to
heavy and probably
’
templated. really understand the context behind the
graphics.
more templated Conclusion
Can you judge a report by its cover? If you’re
And finally, there is a surprisingly large
group who… well… clearly have other
looking for guidance on performance, or a priorities.
message to hold in the mind, then the I look forward to seeing how the
answer is a resounding no – just 14% of landscape will evolve next year. ■
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www.investisdigital.comIR NOTEBOOK 2020 INFORMED
How to stand out from the
crowd in 2020
In an evolving landscape for listed companies worldwide, Sandra Novakov discusses the
issues that IROs should be prioritising in the coming year.
Effective communication of long-term Focus on ESG disclosure
strategy Amid growing calls for action from STANDING OUT
Ensuring that investors understand the multiple stakeholders, including the • Increased focus on long-term strategy
company’s long-term strategy is a public, media and governments, across a and ESG disclosure a key 2020 priority
fundamental task for any IR team. wide range of ESG concerns, investor for IROs.
However, for many, this is proving focus on non-financial performance • More proactive approach by those
surprisingly difficult in the current continues to grow. Among our research who typically relied on the sell side to
environment. A disconnect between sample, a significant 47% of companies communicate their message needed.
internal and external expectations has led state that improving ESG disclosure is a • Greater board engagement key to
investors to increasingly challenge key priority for the coming year. building strong, constructive
management regarding their plans. In recent years, great strides have been relationships with shareholders.
The findings of our 11th annual IR made in this respect across the globe, but
survey, which are based on feedback from as scrutiny intensifies and expectations
479 IROs worldwide, show that 72% of IR rise, those who continue to report only
teams have set educating investors what is required by regulation in their proactive and commercially driven
regarding long-term strategy as by far the jurisdiction risk falling behind. approach to IR. This is clearly evident in
most important objective for the coming their attitude to investor targeting and
year. Engage proactively direct engagement. North American IR
Looking ahead, we expect to see a With the buy side consuming less sell- teams are most likely to research investor
greater focus on identifying investor side research, conducting more research targets internally and engage third-party
perceptions (or misconceptions!), internally and engaging with companies consultants to support this process.
significant upgrades to IR websites and directly, IR teams that typically relied on Having invested this time in carefully
information materials optimising the the sell side to communicate their selecting investor targets, North American
delivery of key messages, as well as more message and arrange investor roadshows companies prefer to engage through one-
frequent capital markets days. on their behalf are now coming under on-one meetings rather than attend
pressure to adopt a far more proactive broker-hosted conferences. The majority
approach. will also contact investors before and after
In this respect, we recommend a meeting to get their views on the
following the lead of North American company.
companies. Our research has shown that By taking this approach, engagement is
companies in this region take the most more effective, valuable and the company
retains greater control over the process.
‘
Strengthen shareholder relationships at
North American all levels
Given the rise in shareholder activism and
companies take passive investment, it is critical to build
strong, constructive relationships with top
the most shareholders, not just at executive
management level, but at board level too.
proactive and Our research shows that, in the absence
of any investor pressure regarding specific
governance issues, a large proportion of
commercially chairpersons and other non-executive
board directors (‘NEDs’) rarely see
driven approach
’
investors outside the AGM. Improved
Sandra Novakov is head of IR at interaction would allow investors to more
Citigate Dewe Rogerson. to IR easily express any frustrations they may
sandra.novakov@citigatedewerogerson.com have and allow board directors to keep
18 IR SOCIETYWINTER 2019/20 IR NOTEBOOK 2020
‘ Given
better abreast of sentiment and gauge guidance now plays a greater role in
likely support in the event of an activist
investor approach. the changes setting market expectations.
Given the changes in market dynamics,
As scrutiny of board actions and it is increasingly important to receive
effectiveness continues to rise, we expect in market regular feedback from the buy side and to
more companies to proactively offer publish your own consensus figures on
meetings with board directors outside the dynamics, it is the website and/or make necessary
changes to the guidance policy to ensure
C-Suite. Ahead of any action, we
recommend taking the time to thoroughly
prepare any NEDs who have not met
increasingly effective expectation management going
forward.
In this dynamic environment –
investors in the past, through appropriate
training.
important to characterised not only by regulatory
change, but also by political and
A fresh approach to expectation
receive regular economic factors – we urge IROs to step
back, take stock, and ensure their
management
feedback from the practices and level of resource remain fit
’
We have seen a rise in the number of for purpose. Acting swiftly to evaluate
companies that have difficulty assessing your approach to IR, make the necessary
market expectations due to a decline in buy side adjustments and secure the appropriate
analyst research and availability of up-to- support to ensure improved effectiveness
date consensus figures, and who feel their in 2020. ■
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