Annual Half-Day Seminar: IRO Teach-In

May 17, 2019 08:15 AM
 Domain 1:
IR strategy and formulation
 Domain 3:
Corporate messaging and development
 Domain 10:
Corporate governance

 

On Friday, May 17th, NIRI NY hosted 100 attendees in the final event of our “Strategic IRO” series at the New York Stock Exchange. In this interactive three-hour boot-camp tailored for IROs and consultants, an all-star lineup of top consultants and IR officers shared their experience in C-suite transitions, M&A communications, investor days, strategic messaging, reputation management and governance.

Each one-hour session provided an overview of discrete and relevant topics, including CEO transitions, IR Days, and ESG trends, outlined best practices and provided the opportunity for the audience to ask questions. The prepared remarks were then followed by a "fireside chat" with a senior IRO who had personally navigated the topic at hand.

C-Suite Transitions by Edelman Financial Communications

The day kicked off with a session on C-Suite Transitions, led by Lex Suvanto, Global Managing Director and Ted McHugh, EVP, U.S. Investor Relations Practice Lead of Edelman Financial Communications. Lex and Ted shared “war stories” of real-world CEO transitions, explaining the subtle strategic and communications nuances that can influence investor reaction. Later on, Gary Weitman, Senior VP, Corporate Relations, Tribune Media, shared his experience helping his management team navigate 11 (!) CEO transitions during his 25-year career with Tribune. Key takeaways from the discussion include:

  • In a management transition, investors’ first question will be, “why?” Management change communications are therefore filled with many subtle nuances, or “million dollar words.”
  • Press releases should be carefully crafted to ensure the Company conveys the appropriate tone regarding the rationale for the transition.
  • Management transitions are frequently announced in conjunction with earnings to reassure the Street that the change is not connected to the financial results or performance of the Company. Reaffirming guidance is also common practice, if possible.
  • Gary noted in his fireside chat that the most effective incoming CEOs take the time to meet with customers, employees and other stakeholders to learn as much about the Company as possible. These meetings also build trust and create a sense of transparency from the start.

Best-in-Class Investor Days by Arbor Advisory

The second session on Best-in-Class Investor Days was led by Sam Levenson, CEO of Arbor Advisory. In addition to the strategic value of hosting an investor day, Sam described a range of specific tactics that the IRO can use to ensure the event is executed as smoothly as possible. Katie Royce, AVP, Investor Relations at Cognizant and President of NIRI NY Chapter, shared her experience hosting a recent Investor Day and how she navigated the process. Key takeaways from the discussion include:

  • Investors say that the single most important factor they consider when making an investor decision is management’s credibility. Face-to-face interactions with management in which investors can personally assess their competence go a long way when it comes to driving shareholder value.
  • Inviting third parties to participate, including large customers, industry analysts, business partners or key opinion leaders, can help round out management’s prepared remarks and add an important outside perspective on the business.
  • Companies should consider hosting an Investor Day before a customer event or on the same day as a peer, alternating morning vs. afternoon, in the same city to help drive attendance, especially during busy periods.
  • Knowing the right time to host an Investor Day is equally as important as knowing how to execute it. Katie discussed how she helped her management team recognize when it was time to shift the Street’s attention to her Company’s go-forward strategy, and how she effectively used an Investor Day to unveil new financial targets and strategic priorities.

Emerging Trends in Governance Engagement by PJT Camberview

The third panel, led by Allie Rutherford, Managing Director and Lauren D. Gojkovich, Director at PFT Camberview, reviewed emerging trends in Environmental Social Governance (ESG). Audience members heard valuable perspective on the widespread adoption of ESG in the investment process, and how they can be better prepared for potential governance-related issues down the road, especially as investors shift from active to more passive strategies. Catherine Creswell, SVP/ Director of IR for Vornado Realty Trust, also shared thoughts on best practices in ESG engagement and corporate governance.

  • Environmental and social proposals gained significant traction in 2018, and continue to represent that highest proportion of shareholder resolutions both submitted and withdrawn in 2019 to date. These proposals represent a fair amount of risk if they do make their way into the proxy statement, so it’s important to be prepared.
  • Activist hedge funds are beginning to leverage ESG issues when driving change at companies. They increasingly deploy governance hooks as a campaign tactic to garner index fund support. A governance and sustainability focus can help to combat the perception that activists are proponents of “short-termism.”
  • In addition to board diversity, shareholder proposals focused on gender pay equity have become increasingly targeted and garnered stronger shareholder support since proposals on this topic first emerged in 2015.
  • Corporate culture is a fast-emerging topic in the ESG space. Many companies view their employees as one of their greatest assets, but navigating the demand from investors to engage on this topic can be challenging. Articulating your corporate culture in a clear, concise manner will be important as this topic continues to gain traction.

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