IR as a Career Requirements and Opportunities The Dansk Investor - - PowerPoint PPT Presentation

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IR as a Career Requirements and Opportunities The Dansk Investor - - PowerPoint PPT Presentation

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Investor Relations Where are we heading? IR as a Career Requirements and Opportunities The Dansk Investor Relations Forening Annual Conference 2015 Copenhagen, Denmark 21 st September 2015 Agenda Part I A Strategic Approach to Career

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Investor Relations – Where are we heading?

IR as a Career – Requirements and Opportunities

The Dansk Investor Relations Forening Annual Conference 2015 Copenhagen, Denmark

21st September 2015

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Agenda

Part I A Strategic Approach to Career Development for IROs

  • Global overview – trends in IR
  • Routes into the IR profession

Part II The IR Role

  • How has the IRO role evolved?
  • The importance of continuing development

Part III A Strategic Approach to Career Development for IROs (cont’d…)

  • The risks and opportunities of the IPO
  • Onward career progression

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Our view on IR

Fidelio has very clear perspectives on IR …

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Executive Search

Through our Pan- European Search Practice we see what companies are looking for in the IR function

Board Practice

In our Board Practice we see shareholders putting more pressure on the Board – great

  • pportunity for IR

Personal Experience

Group Head of IR VW Group Head of IR UBS Co-Head of Global IR Brunswick Former Board Member of IR Society

IR Trends

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Back to basics – Why we need IR?

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Complying with Regulatory Requirements Competition for Capital Expectation Management

IR Function

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Global trends in IR

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  • Globally IR has come of age and we are

seeing an established body of IR professionals

  • Increasing focus on finance rather than

communications – most IROs report to CFO

  • Retrenchment of investment banking

creates opportunities for IR

  • Investors becoming increasingly active

putting pressure on Boards – implications for IR?

  • IR has become specialised and often faces

glass ceiling

  • Gender balance could improve
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The Scandinavian IR market

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  • Across Scandinavia we see growing

importance of IR

  • IR differs greatly depending on the size of

the company – Large cap: bigger team, strong financial focus – Mid cap: one-man team often with wide remit – Small cap: CEO / CFO often responsible

  • Cautious view on IPO as an opportunity
  • Low level of mobility
  • Too few female IROs
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SLIDE 7

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  • UK
  • Biggest IR market by far in Europe. London has a very large pool
  • f IR talent
  • Traditionally a market in which the brokers played a very strong
  • role. This is being cut back, creating opportunities for IR
  • Top of the FTSE100 has some larger teams but throughout the

FTSE we also find one man bands

  • In the IR profession roughly 50/50 gender split but only 20% of

FTSE 100 headed by women

Germany

  • Major German corporates invest substantially in IR, although

recently we have seen budget pressure and increased turnover in IR roles

  • Larger IR teams will often include range of skills including CSR

and digital

  • Shareholder base often follows customer / manufacturing
  • footprint. Several IR teams also have multiple IR offices
  • German IROs have a good track record of moving into CFO roles

IR Regional trends and characteristics

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  • US
  • US is the birth place of IR
  • IR in the US is well established both as a profession for life and as

a career stepping stone

  • High degree of mobility in the US; low degree of international

exposure due to size of domestic capital market

  • IROs are typically highly financially literate with the majority

holding the CFA qualification

  • US IR has become very legalistic versus the Europe

Asia Pac

  • Relatively immature market across Asia Pac with the exception of

Australasia

  • Chinese market still structurally challenging for professional IR
  • Exception: companies seeking access to international capital
  • Sizeable pool of financially literate candidates but limited

number of IR opportunities with a strategic focus

IR Regional trends and characteristics

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Typical background for an IRO

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Internal Hire External Hire Traditional Routes

  • Finance
  • Communications
  • Sell-side Analyst
  • Financial PR
  • Company Broker

Alternative Routes

  • Marketing
  • Divisional Management
  • Legal
  • Buy-side/Hedge Fund
  • Strategy Consultant
  • ECM Banker
  • Private Equity
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Agenda

Part I A Strategic Approach to Career Development for IROs

  • Global overview – trends in IR
  • Routes into the IR profession

Part II The IR Role

  • How has the IRO role evolved?
  • The importance of continuing development

Part III A Strategic Approach to Career Development for IROs (cont’d…)

  • IPO
  • Onward career progression

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Key questions

  • How has the IRO role evolved?
  • What attributes will become increasingly important?
  • Is there an ideal IRO background?
  • Can continuing education help fill any skill gaps?
  • Where to look for education support?

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How has the IRO role evolved?

  • Technical & financial competence now a core requirement
  • 'Soft' communication / networking skills increasingly valued
  • Gaining a much higher profile: both internal / external
  • Market expert / board advisory role
  • Two-tier market:
  • Large cap:

4-10 person teams with defined role

  • Medium/small: 1-2 person teams

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What attributes will become increasingly important?

  • The broader view: articulating the sustainable business model
  • Strong commercial understanding of business & industry
  • Project & adviser management
  • Flexibility in communication: not just the numbers/script
  • Interpretation
  • Context
  • Wide-ranging Q&A

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Recent surveys

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Topic Survey results Profile of role

95% felt IR had grown in importance

Sell-side in 3 years Only 8% think sell-side will stay same; 33% think very different Career path Only 49% felt more IROs in C-suite within 5 years Expanding remit

2x increase (to 30%) IRO full engagement in Remco

discussions Key focus

82% felt educating investors on company strategy

Roadshow targeting

5% entirely happy with brokers ability to find

best investors for roadshow

Survey results 1-3. IR Society 2015 conference poll; 4-6. Citigate Dewe Rogerson 7th IR Survey

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Is there an ‘ideal’ background?

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Criteria Ideal? RKH Experience University degree Economics/ finance Medieval History Professional qualification ACA/CFA etc. None Financial markets experience Broking/equity analyst/ Investment Banking 7 yrs investment banking Corporate/ Industry experience Key in certain sectors (Insurance, Resources etc) 11+yrs in-house corporate finance IR/other experience Broad exposure to IR events/ market situations Set up IR department 3x IPO on NASDAQ IR Society board Pension fund trustee & NED

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Can continuing education fill the gaps? Technical skills:

  • regulatory
  • financial modelling
  • best practice

Soft skills

  • presentation skills
  • messaging/ scriptwriting
  • internal/external networking

PLUS Practical 'on the job'

  • helping at AGMs, CMDs, site visits

experience

  • annual report drafting/ proofing
  • analyst & investor events
  • industry exposure

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Where to go: UK IR Society Education Programme 'Core' courses

  • 10+ courses on broad range of IR topics

‘Advanced' courses

  • Financial modelling for IROs
  • Debt IR
  • ESG/SRI
  • DELIVER programme

Club IR workshops

  • Consensus management
  • Digital IR
  • What makes a good board report
  • Bringing a new NED on board

Networking

  • Club 22 dinners
  • Club 11 lunches

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Agenda

Part I A Strategic Approach to Career Development for IROs

  • Global overview – trends in IR
  • Routes into the IR profession

Part II The IR Role

  • How has the IRO role evolved?
  • The importance of continuing development

Part III A Strategic Approach to Career Development for IROs (cont…)

  • The risks and opportunities of the IPO
  • Onward career progression

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Opportunities (Pro) Risks (Con)

Potentially high profile

  • pportunity

IRO runs the risk that the IPO might not take place Transactional experience Pre-IPO IR differs substantially from post IPO IR Useful network across investors, bankers and within the company Business owners may have a lack of understanding of the importance of IR

IPO : Opportunities or risks for IROs

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What Pre-IPO companies are looking for?

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  • A healthy IPO market creates opportunities for IR
  • We see increased recognition from asset owners that good IR influences

valuation

  • Three models of IR in an IPO transaction:

Model I – Interim IR/ IR Advisory Model II – Appointing a permanent Head of IR ahead of the IPO - a clear statement of intent to the market Model III – Post IPO appointment of a Head of IR

  • Asset owners have different requirements for IR in an IPO:

Private Equity – very sector focussed and heavily financial Family business – culture extremely important Privatisation – corporate experience, as well as IR experience is important

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Roles into IR function Future roles Head of Investor Relations Internal

Head of Strategy CFO Subsidiary Head of Communications

Internal External

Finance Communications IR Banker

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IR Officer External

Head of IR Consultant Non-Executive Director

IR Career progression

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Recent examples of IR as a “Stepping Stone”

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Case Study Former Role Current Country

I Global Head of IR at a Global Financial Services Company (FTSE100) Group Finance Director, International Financial Services Company (FTSE250) UK II Global Head of IR at a Global Telco CFO, major Telco Subsidiary Germany III Head of IR at a Global Telco Group CFO, International Telco Netherland IV Head of IR at a Global Healthcare Company CVP, Corporate Financial, Global Healthcare Company Denmark V Head of IR at a Global FMCG Company Head of Major Finance Division, Global FMCG Company UK, Netherlands VI Group Head of IR Corporate Development and Implementation of a Low-cost Airline Acting CEO, Low-cost Airline Asia VII SVP of Finance, Strategy and IR at a Global FMCG Company Group CFO, Global FMCG Company USA

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Plea for Strategic IR

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Steps towards Strategic IR

  • Engage on strategic topics
  • Get involved in tough governance

issues

  • Have the gravitas and conviction to

speak truth to power Skills required

  • Heavy duty valuation skills
  • The story teller
  • Influencing inwards and outwards

Q: Is IR a mouthpiece or strategic advisor? A: Sadly many Boards do not recognise the value IR contributes

Source: Fidelio Partners “Plea for Strategic IR”

Convince the Board, Colleagues and Investors that IR deserves “A Seat at the Table”

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IR operating at Board level

The Board

CFO Investor Relations

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Remuneration Activism Investor Perception Surveys Governance

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Conclusion

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IR is a complex and critical profession for a quoted company To be successful the IRO must master a number

  • f skills.

If the IRO aspires to a Board role it is critical to keep developing in and beyond the role IROs need to think about articulating their own value not just the value of the company

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Gillian Karran-Cumberlege

Fidelio Partners www.fideliopartners.com Email : gkarrancumberlege@fideliopartners.com Telephone : +44 (0)20 7759 2200

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