Irwin’s annual State of Investor Relations survey uncovers a wide range of IR trends through the lens of the IRO, management teams, and external consultants. This report highlights the opportunities, challenges, and insights that companies are facing as we enter 2024 from an investor relations perspective.
This report analyzes and brings together findings and insights from 168 companies globally who completed The State of Investor Relations survey.
2023 highlighted the essential need for IR professionals to be agile, informed, and, importantly, equipped with the right tools. Navigating market fluctuations demanded clear and timely communication and the right insights for effective decision-making.
When we asked IROs what their biggest IR accomplishment or initiative was in 2023, there were a few standouts. 20% of IROs mentioned their biggest accomplishment was facilitating an event like a capital markets day or in-person investor day.
There was also lots of success around adding analyst coverage, with 20% of IROs mentioning the addition of sell-side analysts or attaining new coverage.
Other notable accomplishments on the lists included many companies achieving success despite economic uncertainty, or bringing new executives up to speed.
For the second year, finding new investors made the list of top challenges for IR going into 2024.
For IROs, consultants, and executives, finding new investors is just as much about crafting and marketing a compelling investment story as building lists and conducting outreach. To effectively win in 2024, IROs must demonstrate how their company differentiates from peer investment opportunities and how it has sufficient liquidity, revenue growth, and a sustainable cost of capital.
IROs will need to spend more time on strategic initiatives in order to overcome this narrative challenge. While 76% of IROs plan to spend more time on investor targeting and engagement this coming year, and 61% plan to spend more time crafting and perfecting their company story, but there needs to be an improvement in efficiency and process to make that happen.
For IROs to free up more time, they will need to reduce the time spent on administrative tasks such as data uploads and task and tool management, as administrative work is the number one distraction, especially in larger companies.
In the pursuit of growth, efficiency is the most crucial tool for an investor relations officer (IRO). To grow effectively, prioritizing the development of influential internal relationships and bolstering the role of investor relations in company strategy are essential.
To no one's surprise, the top challenge for nano-micro cap companies as we head into 2024 is reducing stock volatility. Rising interest rates, inflation effects from 2023, and high debt acquired during better market environments have led to one of the busiest years in corporate bankruptcy in more than a decade.
In addition to bankruptcies, the market’s unpredictable twists and turns have bred a new era of volatility that can put even the best companies at risk. In 2023 alone, we saw the collapse of Silicon Valley Bank, the demise-turned-rescue of Credit Suisse, tech stocks like Meta and Tesla stocks seeing triple-digit growth, and the rise of AI.
Smaller companies have undoubtedly paid the price, with more than half the stocks in the Russell 2000 seeing drops this year. The first half of the year saw smaller companies benefitting from the equity market rally, only to see them hit hardest by short sellers during the recent pullbacks.
There are many ways that companies and IR in particular, can mitigate volatility, using tools like stock surveillance to better understand position changes on a more frequent basis, building stronger relationships with existing shareholders, and diversifying your shareholder base by finding new long-term investors to create stability.
IR plays a significant part in managing stock volatility and driving company innovation and growth as they build relationships with prospective and current investors, and ensure that the investment community understands the company differentiators and value drivers.
One of the most important functions of IR that you’ll never see in a job description is the required ability to “see around corners." Being able to see around corners within your stock means you have a deep understanding of your current shareholder base, the risks and opportunities, and the perceived and actual value drivers of your company for investors as they decide where to invest.
This part of the role requires internal strategic influence, strong relationships with prospective and current investors, and your finger on the pulse of analyst's views, estimates, and perspectives.
A clear demonstration of this concept from this survey is the combination of how IROs are planning to approach 2024:
But it is a lot of weight for these traditionally small teams to carry, and because of the evolving nature of the role, a lack of innovation and integration in their toolsets, and the sheer volume of work – the battle for growth, differentiation, and capital will be won by those who can ruthlessly prioritize, effectively manage their time, tools, and attention, and take their seat at the strategic table.
That’s not all we discovered.
Our report reveals the top challenges companies currently face, what will change in the coming year, and how these priorities differ for IROs, management and consultants. Plus, we identify the most significant areas of opportunity for investor relations as we head into the new year.
We also hear from the community about the path forward for IR events and meetings, and learn about the most critical functions of the digital toolset for the IR profession.
Finally, we share how IROs can better set expectations, track goals and measure KPIs, and we identify critical IR priorities for companies, by market cap, in 2024.
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