Once a virtually unknown activity, it has taken IR in Spain only a few years to plant its flag firmly on the European map. With a record number of companies now listed, Iberian IROs are making big waves as Spanish companies realize the importance of transparency and communications for long-term investor relationships.
On the regulatory front, the nation reacted quickly to concerns arising from the Parmalat scandal in Italy, and accelerated the implementation of last year’s transparency laws – originally scheduled for 2005 – which are now to take effect almost immediately. Under a government decree issued in early January, listed companies must now prepare full corporate governance reports by mid-February, and post them online.
These reports are still pretty general by some standards and have to contain only basic information on ownership structure, management compensation, procedures for shareholder meetings and areas of compliance with local best practice codes.
Sign of the times
‘Spain is living a very sweet IR moment,’ says Manuel Enrich, CEO of communications consulting firm Eurocofin – a far cry from his early days as an IRO at Bankinter 13 years ago. ‘We didn’t have a team, we didn’t have a budget – we didn’t have anything,’ he explains. This is in stark contrast to some of Spain’s more notable present-day IR teams such as those of Telefónica, with its 13-person IR department, and Endesa, which has IROs based in Madrid and New York.
At this year’s IR Magazine Eurozone Awards, Iberian companies came out on top, alongside their French and German peers, to scoop five awards and receive commendations in at least ten different categories. ‘In the last three or four years there has been a substantial improvement in IR in Spain, both quantitatively and qualitatively, which has erased the old gap between IR in Spain and IR in other European countries,’ Enrich explains.
Today’s thriving and highly professional Spanish IR scene came about partly in reaction to the depressed market conditions of recent years. The difficult environment landed many locally listed firms in choppy waters after the buoyancy of the early 1990s, when Spain had enjoyed a high international profile thanks to the Olympic games in Barcelona and the world expo in Seville.
Getting organized
But while the global downturn in investor confidence certainly became a wake-up call for Spanish corporates on the prowl for global capital, the concerted efforts of Spain’s IR society, Aeri, have played just as important a part in making the results so impressive. Founded in 1990, Aeri remained virtually idle until just one year ago when it underwent what José Carlos Dur?n, director of IR at Amadeus and new Aeri vice chairman, describes as a ‘little revolution’.
According to Ricardo Jiménez, Aeri’s new president and director of IR at Ferrovial, what has occurred is nothing short of a new beginning. ‘We changed the board of directors, the president and the vice president; we even moved to new offices because we wanted it to be a total re-start,’ he says.
Today, with 43 corporate members, Aeri represents 92 percent of listed Spanish capital. Even so, says Jiménez, the focus is now to pay more attention to small and medium-cap companies through forums, seminars and other meetings where IROs old and new can learn more about the key issues.
The onset of Spain’s transparency law will certainly be one area where many companies need guidance. According to research by Spain’s main market regulatory body, the Comisión Nacional del Mercado de Valores (CNMV), 35 percent of listed local firms still fail to provide links to corporate governance and IR issues on their web site.
According to Jacinto Soler-Matutes, research director of law firm Soler-Padró Morrow, the new rules are an important first step that many local companies could have trouble implementing. ‘There have been a lot of comments from the corporate community that this acceleration of the implementation time should have been discussed earlier,’ he says. ‘Although many of the large Spanish firms already comply with these guidelines, this is definitely going to affect small and medium-sized companies.’
Spanish companies have established an admirable track record in investor relations in recent years, bringing them level with their more experienced European peers. It remains to be seen whether the country can stay the course and continue to shed the remnants of its old corporate culture.
