IROs expand outreach as they brace for macro and political headwinds, finds new research

More than two fifths (43 percent) of IR professionals are braced for macroeconomic and political headwinds as we move further into 2024.

Macro weakness and ongoing uncertainty in the global operating environment are key concerns impacting the IR role, according to new data, with further sector-specific challenges around telling the equity story in a risk-averse climate of low investor appetite.

The fifth annual Global IR Issuer Pulse Report from Nasdaq points to biotech, energy, real estate, financials and industrials as well as nano to mid-cap company IROs citing greater issues in getting their equity story out to investors in the current environment.

The wide-ranging survey covers themes including IR career paths – with Nasdaq noting an increased flow from the sell side – increasing internal collaboration between IR and different departments, a look at how IR engages with the board and how the profession is ‘cautiously optimistic’ around generative AI.

It isn’t all doom and gloom, however, with Nasdaq noting that some of the same issues IROs cite as headwinds could actually give their roles a boost in 2024.

‘A share of respondents point to a favorable macro backdrop as the most beneficial to their roles, citing stabilization in interest rates, abating market concerns, the 2024 US election outcome, normalization of yield curves and more certainty on regulatory changes as potential positives,’ write the report authors. ‘Respondents also note that standardization of ESG reporting, AI integration to ease workloads and surface insights, elevated shareholder engagement and improved market sentiment are supportive [of] the IR function’.

Comfort with discomfort

Talking about some of the surprise findings, Foli Pontillo, head of IR Intelligence at Nasdaq, explains: ‘IROs report that investors are more concerned with company or sector-specific themes, rather than the macroeconomic landscape that previously took the lead.

‘You reach a point where you become more comfortable with the discomfort that uncertain markets cause. IROs are focused on navigating what’s within their control [and] the way a company withstands near-term pressures can influence market sentiment and [investors’] conviction in the long-term equity story.’ 

Pontillo, who led the survey behind the report, also describes an increasing focus on investor diversification as risk appetites shift.

‘Across all regions, IR professionals cite attracting international capital as one of their greatest areas of opportunity,’ she says. ‘In a growing trend, we’re seeing the introduction of IR representatives in new regions [and] tailored messages to attract foreign investors, as well as an uptick in management teams’ openness to travel overseas.’

The expanding remit of IR

Pontillo further points to AI as a topic she describes as being ‘top of mind for IR professionals’. This is particularly true, she adds, ‘when we think about the expanding remit of IR’, where leveraging technology to improve workflow efficiencies is critical.

‘IROs continue to execute their traditional roles, but more responsibilities are being piled on, with ESG emerging as the top addition to the IR professional’s broadened scope, followed by corporate communications and strategy,’ she says. In fact, Pontillo notes that ESG has emerged as the key additional responsibility for the fourth year in a row.

Amid these pressures, Pontillo says ‘finding creative ways to interact with the investment community continues to be a priority. Issuers are being much more selective about when and how to execute larger in-person events, such as investor days, which now occur most commonly around a strategic reset or when issuers have something new to share with the market.’

Other trends highlighted in the research point to increased engagement with the board, with Pontillo noting that more IROs are ‘leveraging board members to provide unique perspectives in their engagement efforts with the marketplace’. At the same time, she says ‘IR professionals are more empowered to truly own and shape their investor engagement roadmap’.

Click to read IR Playbook: Artificial intelligence and investor relations >>