Investor relations plays an integral part in the health and success of public companies globally.
This year, businesses faced tremendous challenges, forcing IR teams to undergo new transformations to stay afloat. From the impact of the global pandemic to increased economic and market volatility, IR departments not only had to manage changing investor expectations, but also continue to articulate what will drive value over the long term.
With 2023 on the horizon, we set out to better understand the community's various challenges to better prepare for the new year ahead. We also uncovered the top trends that will continue to drive investor relations forward so that you can align your IR strategy with the future strategic objectives of the industry.
To do this, we surveyed IROs, management teams, and external consultants directly about opportunities and challenges that companies are facing from an investor relations perspective.
Based on our 'State of Investor Relations' survey, we put together a report that analyzes and brings together findings and insights from 103 companies in the US and Canada and offers a full view of the community's priorities in 2023.
A significant trend we noticed during the analysis was respondents' felt a lack of alignment between management and IR. It's not that management thinks IR is less important. In fact, 67% of C-level executive respondents feel IR is even more important in 2023, given the current market conditions. Instead, misalignment tends to stem from management engaging in more menial IR tasks, and 33% cited a feeling of unpreparedness during investor interactions.
To prosper in 2023, more focus on preparing management teams for important IR activities, and more engagement from the C-suite, will be particularly crucial.
A popular phrase in the industry is that IROs "wear many hats.” The role of the investor relations officer continues to evolve from that of a reactive contributor to a proactive leader. Companies can create better alignment through IR's involvement in more strategic processes. IROs must have access to the C-suite and the board, with more than 60% of IRO respondents agreeing that this would make them feel more valued.
We also found almost 90% of C-level executives spend up to 25% of their time on IR. In 2023, IROs must take a more active role in planning and articulating company strategy, so that management can spend more time driving key business results, focusing on innovation and customer and employee experience. IROs who continue to find ways to add strategic value will play an essential role in a company's path forward for success in 2023.
Did you know the average IRO uses two to five digital tools to run their IR program? This number increases to more than five for 25% of IROs at large-cap companies. With so many different tools, it becomes harder to work efficiently and leaves limited time to focus on strategic initiatives. Instead, more time is spent navigating the tech stack and trying to surface actionable insights from fragmented solutions.
In 2023, IROs must streamline their digital toolset to increase access to critical data, improve business continuity, and save time. Compared to non-customers, we found that Irwin customers who were surveyed are able to spend up to 3x more time working on strategic IR initiatives, such as compiling lists of new investors, communicating with prospective investors and engaging with current stakeholders.
Learn how Irwin helps IROs streamline their everyday processes.
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 2023.
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