With the growing importance of financial communication, IR is also part of internal audits: the larger the company’s market cap, the more likely it is to have an internal audit of the IR function. However, this is still uncommon – with only a third of organizations surveyed auditing their IR functions.
There is also a noticeable disparity between what kinds of issues were discussed by a representative at board meetings and presented in reports. For example, 79% of respondents reported they discussed information around investor activity in reports, but only 62% of respondents said they discussed this topic in meetings. Similarly, 49% of respondents indicated they discussed liquidity of share trading in reports – that figure was just 28% when it came to meetings.
There was also disparity in what respondents in different geographies discussed in IR-board correspondence. For example, IR representatives reported themselves more likely to have board meeting discussions around shareholder activism and engagement issues in the Americas than in other regions. This is possibly an indication of higher levels of shareholder activism in American financial markets.
However, American IRs were also less likely to discuss issues around regional regulatory changes – possibly because issues like this are more likely to be handled by the general counsel or corporate secretary in US and Canadian organizations.
Reports – as with audits – may tend to have more details about what’s going on, but boards still need to understand why changes are happening to make the right strategic calls. Having an IR function will only have an impact if its findings are properly digested, discussed, and understood.
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