Investors, IROs, finance directors and CEOs all gathered in Dublin on April 3 for our first IR Magazine Ireland Awards & Conference. The event was the first of its kind in Ireland, and was targeted not only at investor relations professionals, but anyone keen to expand their understanding not just of the nation’s close-knit investment world, but of the increasingly international pool of capital being tapped by Irish companies.
And Irish companies have a lot to talk about. The large caps have established a solid reputation with the international investment community, while smaller caps are steadily bringing their investor relations standards up to best practice. In the words of one fund manager, ‘The bar has been raised and Irish companies have responded well in order to entice foreign investors.’
According to our Ireland Research Report 2003, which includes lists of nominated companies and verbatim comments from investors and analysts about the winners as well as general IR trends, Irish IR is well regarded by the vast majority. No fewer than 72 percent of investors and analysts say Irish IR has improved over last year, with the rest merely remarking that it has remained the same. None of the respondents say the overall quality had declined – a response that is unique among the eleven awards surveys we now do around the world each year.
Local style
Ireland looks different from the other regions we research because investors and analysts have uncommonly close relationships with the CEOs and CFOs of the companies they cover. The respondents are unanimous in their opinion that frequent access to senior management in face-to-face meetings is key. This relationship means companies are less likely to do formal presentations in large meetings, and most firms’ IR is driven by senior management rather than by dedicated investor relations departments and IROs.
Even Ryanair, one of Ireland’s ten largest companies, doesn’t have an IR department at all. But there are notable exceptions: the IROs at Kerry Group, Irish Life & Permanent and Bank of Ireland are well acknowledged, highly rated and perceived to be at the core of their respective companies’ strategy.
Meanwhile, although the number of corporate web sites has significantly increased in recent years, most Dublin-based investors are still unlikely to log onto the internet for IR information: ‘I don’t believe what a web site says and it’s the last place I’d look for any bad news,’ says one fund manager in the survey. According to another, ‘I know these companies so well, I really don’t concern myself with their web sites.’
The awards
After 2002, a year in which Ireland’s corporate world was rocked by major scandals, corporate governance has predictably moved to the top of the investor priority list. Allied Irish Banks, for example, hit the headlines because of a rogue trader at a US subsidiary.
Even so, AIB was the star of the event, picking up three separate awards including the grand prix for best overall investor relations for a large cap thanks to the efforts of its IR chief, Alan Kelly. ‘AIB did so well in difficult circumstances – a textbook approach that paid off,’ remarked one analyst.
‘The important thing,’ says Kelly, ‘is to be out there in both the bad times as well as the good times, making sure investors are kept up to speed on the story.’ Indeed, the survey shows a general consensus among investors and analysts that transparency and disclosure has mostly improved in Irish companies.
For Kelly, the success of a good IR department hinges on a broad company effort, including that of top management. ‘We were delighted to win the three awards. I think it is a consequence of a strong IR effort over many years, not just the last twelve months, and it’s really a combination of the efforts of the team,’ he says.
Paul MacQuillan, finance director at Jurys Doyle Hotel Group, which took home the grand prix for best IR at a small or mid-cap company, also understands the value of good communication efforts, especially in times like these: ‘There is an increase in demand from shareholders for greater transparency, and I’m not just talking about transparency in accounting issues; it’s transparency in relation to the strategic plans for the company.’
The questions investors are asking, according to MacQuillan: ‘What’s happening in your industry? Where do you fit in within the industry’s key trends? What’s your vision for the business and how do you see your company evolving over the next ten years?’
According to one fund manager, ‘Jurys has grabbed IR and taken it to its heart. It has seen the need for a clear-cut strategy, which it articulates well.’
A solid understanding of company strategy is also highly valued by Barry Walsh, head of IR at Irish Life & Permanent, the runner-up in two separate categories including best IRO. ‘It’s not all about logistics and organizing and being a conduit, you have to be close to the people involved. You have to have an understanding and be close to the business.’
Engendering trust means knowing your business inside out – ‘So you’re not just acting as a conduit who then has to go back to management,’ says Walsh. ‘When people are talking to you they should know they’re going to get a level of information and confidence.’
Walsh’s strong knowledge of Irish Life’s business has made him the ideal point man for analysts and investors alike. Here’s what one analyst in the survey has to say: ‘Barry Walsh is a truly exceptional IRO and is interchangeable with the CEO. No, on second thought, I would rather meet with Barry.’
Many factors have contributed to the changing face of Irish IR in recent years, including globalization, Enron-type scandals and difficult market conditions. Based on the findings of the Awards research, IR has clearly become an imperative for Irish companies seeking to raise capital and expand their shareholder base, particularly overseas. Now the challenge is for smaller Irish companies to adopt the same world-class IR standards as their larger peers.
Click here to see the winners
How the winners won
Mary Maude Research interviewed 50 sell-side analysts, buy-side analysts and fund managers to identify the award-winners and discuss trends in Irish IR. Most of the respondents were based in Ireland, though some UK ones were included. For a full copy of the Irish Research Report 2003, check out www.irawards.com
