London Stock Exchange IR Masterclass: Key Takeaways
How can digital tools improve your investor relations (IR) program? This is a question that investor relations officers (IROs) are asking every day especially since the pandemic caused a massive shift from offline to online IR communications. On March 11, five executives from the IR world gave their perspectives on the evolving role of digital in IR at the London Stock Exchange IR Masterclass. Their collective insights offered a snapshot of the digital state of the art in IR.
About the Panelists
The panelists consisted of a cross-section of experts:
- Michael Hufton: founder and managing director, ingage IR (and panel moderator).
- Matt Johnson: group Investor relations director, Vodafone (an Investis Digital client).
- James Collins: director of IR, Sainsbury's.
- Al Loehnis: director of strategic business development, Investis Digital.
- Caroline Dawson: investor relations manager, National Grid plc.
Following are the themes emerging from their conversation.
Start with Your Audience
Matt Johnson discussed Vodafone’s embrace of IR since he joined the company in 2020. One of the points he stressed: digital content and digital formats matter because IR’s audience is increasingly digital-first. He contrasted his personal use of digital as a Millennial in his 40s with that of his teen-aged daughter. Johnson said he communicates with text, and, if he’s feeling bold, with emoji. By contrast, his daughter uses visual stories. When she wants to communicate with someone, she sends a Snapchat video or, as a fallback, a selfie photo.
“In 2022, we have people who were born in the 2000s entering the workplace,” he said. “They have grown up with technology in a fundamentally different way having grown up with multi-media. Our approach needs to recognize that our audience is shifting.”
As Vodafone adapts to the rise of a digital-first audience, the company is aggressively embracing digital formats such as video for its capital market days. He said that Vodafone has done four capital markets days in 12 months, and all have used pre-recorded video presentations supported by video case studies. Doing so gives Vodafone a means to distribute content quite differently than it did in the past.
“Everything we have done in the past can be disrupted by video,” he added.
Digital Supports Relationship Building
James Collins stressed the value of digital in supporting relationship building by giving a company measurable feedback on what investors really think of the company. But to do that, digital needs to be employed in a disciplined, sustained way with a customer relationship management (CRM) software. Otherwise, a business will fail to capture and report back investor sentiment.
“Having used a platform to talk with investors gives us a way to get a degree of candor and quality of feedback,” he said. “This has been incredibly effective for us. Getting good quality feedback is what digital does for us, and that feedback helps us build stronger relationships with investors because we understand them better.
Caroline Dawson also underscored the value of digital to support, but not replace, relationships. She discussed how important it is for IR to build trust with investors, and digital provides value when it helps the business build that trust by delivering content that investors care about and by connecting corporate executives more efficiently.
“Everything we are doing is about trying new things, taking a few risks and making investors more appreciative to get access to new content,” she said. “IR is no longer guys in suits lining up at a podium to talk – now it’s about enhancing a conversation with content, not replacing it.”
Building Trust and Breaking Down Silos
Al Loehnis provided a perspective based on years of helping IROs incorporate digital. “Back in the early 2000s, the challenge was persuading companies they needed a website,” he said. “IR teams were not getting support internally. Today, the obstacle to succeeding with digital remains the same: you still have organizations that are structured in silos, and they are not always as joined up around digital as they could be. The challenge is getting different stakeholders to sing from the same hymn sheet.”
But, he noted that the pandemic accelerated the update of digital in IR largely because businesses were left with no choice. He said the first six months of the pandemic in 2020 accelerated the uptake of digital by six years.
“It's taken a long time to change, but it’s getting there,” he said. “Digital still needs more evangelists. The organizational structure of companies can get in the way.”
Breaking down silos is one challenge IROs face with digital. Another is building trust with senior management to embrace digital. The panelists agreed that building trust starts with taking measured steps. Dawson said, “Some people are naturally shy about the unfamiliar new world. It is important to have a clear plan of what you want before you do it. You can talk them through risks and the upside of what will go right. As things go well, we build that trust with stakeholders internally.”
Johnson underlined the need to experiment together. “I work for a digital-first business, so I have an internal stakeholder group that is far along with digital,” he said. “I have a completely open book: pre-recorded presentations for instance. We did our first pre-recorded capital markets day and we used the Investis Digital platform for live chat. Imagine that. It’s terrifying to have that dialogue open to the public. But experimentation has been the most powerful part about our journey.”
Hybrid Events Are a Work in Progress
Part of the conversation focused on the value and format of hybrid IR events. Panelists agreed that finding the balance between online and offline with events remains a challenge, but getting it right is critical.
No one disputed the inherent value of using digital for events. Johnson, Collins, and Dawson all remarked on how digital has made IR meetings more bearable for management by easing the strain of travel. As Johnson noted, “after we did our first road show online, we realized we are never going back. There is no more getting on the airplane for every meeting. The management team is more relaxed. The team is not tired from travel. The quality of the communication is better.”
Dawson added that online events gives management better and faster access to a global audience – again without the requirement of getting on an airplane.
“It is not just about maintaining relationships but meeting new investors and telling our story in a powerful way online,” she said.
But businesses have found that they don’t want to do everything online. Executives miss the in-person dynamic, and they don’t want to abandon in-person meetings completely. As Collins noted, there is value in getting senior management away from their desks and in a room with their audience, where their focus changes from the day-to-day needs of operating a business. This has led to an interest in conducting hybrid events where a company speaks to an audience in a physical setting while the content is broadcast online.
This approach, though, can create a subpar experience if not managed well. “Hybrid is difficult,” Loehnis said. “Speakers are focused on people in the room in front of them, which can be alienating to people watching virtually. And the event producers don’t always remember that content needs to be adapted for an online audience, especially post the event. No one online wants to view people at a podium presenting 200 slides, but I’m still seeing that happening. For an on-demand audience, you need to think about editing and presenting the content in a way that signposts the different parts and brings out your key messaging. Companies leave value on the table when they create events without considering the distinct needs of an on-demand audience.”
For More Information
To view the entire panel and master class, please view this link. To improve the way your IR team builds trust with digital learn more about our Investor Relations solutions here or contact Investis Digital.