For many companies, 2018 will be the time to refresh your corporate communications to reflect increasing investor expectations as well as the new NZX Corporate Governance Code. While the new Code is “comply or explain”, it recognises growing activism among investors. Companies need to recognise that competition for investor funds increasingly involves a more rigorous approach to communication than has been effective in the past.
January saw an open letter to CEOs from Blackrock, the world’s largest investor with $US6.3 trillion under management. Blackrock CEO Larry Fink wrote of growing anxiety among investors about the capacity of companies to create long-term value. He is calling for companies to describe their strategy for sustainable, long-term growth and not only talk to their financial results but also show how they make a positive contribution to society.
Read on for more information on issues to consider to ensure your investor relations approach remains not only compliant but best practice. Action points in response to Larry Fink’s letter are suggested below.
With results season and annual reports now wrapping up, companies are starting to think about their Annual Meeting. Earlier this year, the Australasian Investor Relations Association (AIRA) hosted a briefing which included commentary from Computershare Australia on trends in annual meetings during 2016. While ASX listed companies are usually significantly larger than New Zealand, there are many similarities and learnings which can be shared across the ditch.
Some of the key outtakes can be read here.
The Australasian Investor Relations Association (AIRA) recently held a briefing and Panel discussion on conducting successful results announcements and briefings. While Panel members were from large ASX listed companies, interestingly, many of them are moving towards the more simplified and cost effective practices of their small and medium cap peers.
A summary of their comments, as well as our own recommendations for best practice results announcements, can be read here.
ESG helps to improve performance, protect reputational assets, and win shareholder and stakeholder trust. The top three reasons for reporting on ESG are:
1. Improved Access to Capital: Socially responsible investors – both private shareholders and large funds - are now factoring ESG into their decision making processes and demanding more disclosure and transparency on companies’ ESG initiatives and measurements.
2. Better Risk Management: Companies that measure and understand ESG risk are likely to have a more accurate holistic view of the company as a whole and therefore an enhanced view of corporate risk.
3. Enhanced Long Term Performance: Evidence is mounting that shows companies that pay attention to ESG factors perform better in the long term. ESG factors also provide a way for companies to improve and differentiate their business.
Read more about the growing demand for ESG disclosure.
Our first review is on the National Business Review, one of New Zealand’s fastest growing and innovative business media outlets.
This is one of the key communication events of the financial year for listed companies. As well as disclosing the financial results, this is an opportunity for companies to engage with shareholders, tell their story and share their vision. There are a number of different communication channels which can be utilised including management video, results call, investor roadshow and media interviews.
As technology improves and the cost of webcasting comes down, it has become a more useful tool for investor relations. Primarily, it helps to reach a wider audience and also helps companies meet their continuous disclosure requirements by ensuring that there is open access to information provided at shareholder briefings and annual meetings and so on. This Snapshot Report provides a simple overview of the use of webcasting and a guideline to what costs can be expected.
A recent record AUD $1.2 million fine for an Australian listed company has demonstrated the need for management to be aware of their disclosure requirements around analyst briefings. It has also raised awareness of best practice around managing market expectations and consensus.
There are a number of guidance notes and reports from regulatory and investor groups to ensure management are aware of their continuous disclosure obligations in regards to analyst briefings and managing consensus estimates.
Ellis and Co has compiled a snapshot summary of these documents and tips for management to consider when briefing analysts.
Since the start of the GFC, there has been a tightening of the investment market, and it has become increasingly challenging for companies to attract and retain investment funds.
However, in recent months, we have seen a renewed interest in investing in shares, with several popular listings on the NZX and investors looking for new opportunities.
This is a good time to make sure you have the right strategy in place to get investors interested in your business. We have collaborated with the experts to put together our Top Ten Tips to help you get investors buying your shares.
2018 IR Refresh and Action Points
Annual Meeting Update
Successful Results Briefings
Why ESG is important
Media Snapshot: NBR
Making the Most of your Results Announcement
A Simple Overview of Webcasting
Analyst Briefings and Disclosure
Getting Investors Interested In Your Business
Creating a Winning Annual Report
Reporting Non-GAAP Information
Updates to NZX Issuer Pages
The Importance of Shareholder Communications
Quick Guide to Issues Management
The Changing Media Climate
Are your staff listening? The importance of internal communications
To tweet or not to tweet, that is the question
Creating News on a slow day
Customer Service IS PR
Changes to Companies Act create opt in regime for shareholders
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