Last year’s IR Society conference took place the day before the UK’s referendum on membership of the European Union. This year the conference occurred amid similar political uncertainty, given the recent UK election that resulted in a hung parliament.
David Lloyd-Seed, chairman of the IR Society and director of IR at O2, hopes the IR profession will show its worth amid the uncertainty. In his opening speech, he said the world is going through ‘seismic’ change in everything from politics to governance and regulation.
Against this backdrop, Lloyd-Seed said IR could provide ‘reason, logic and stability’. He joked that IR could even be ‘strong and stable’ – referencing Prime Minister Theresa May’s now infamous sound bite, which came back to haunt her when she proved anything but in the recent election campaign.
The early sessions focused on issues thrown up as much by politics as business. Lady Barbara Judge, chairman of the Institute of Directors (IoD) and, among a long list of prestigious posts, a former SEC commissioner and chairman of the UK Atomic Energy Authority, said the corporate world today is facing a breakdown in trust.
Judge said anger at executive pay is, for the IoD, the greatest threat to trust in business. She also labeled quarterly reporting as ‘the big villain’ for encouraging short-termism. In response to a question from Evan Davis, the conference moderator, she said the biggest change she’s seen in the business world during her career is the move from a focus on shareholder value to a focus on stakeholder value – that’s a ‘really big shift,’ she noted.
With the theme of trust – or lack thereof – firmly established, the conference moved on to a panel discussion that tackled communications in a post-truth world.
Ed Humpherson, director general at the UK Statistics Authority, began by questioning whether we really live in a ‘post-truth’ era. That suggests we used to live in a ‘truth’ era, he said. Nils Pratley, financial editor at the Guardian, similarly pointed out that in 20 years as a journalist he couldn’t remember a golden age of corporate reporting. It’s always been bad, but it’s got worse, he said.
Lloyd-Seed, now a panelist, came to the defense of the business world, or at least the IR profession, saying IR acts as the bastion of truth in today’s information wars. Returning to the topic of corporate literature, the panel concurred that annual reports today are too long and complex, and there was much to be said for a stripped-back, black-and-white effort to improve clarity.
Two concurrent sessions followed on IR basics and IR during a crisis, before everyone returned to the main hall for panels on regulation. Speakers gave insights into the nuances of how Mifid II could change the company-broker-investor triumvirate: amid a fall in analyst numbers and research output, it was predicted that companies will need to run more teach-ins for investors and deal with a wider spread of consensus figures.
No one thought significant change would happen overnight, following the implementation deadline for the far-reaching regulation of January 1, 2018. First investors need to get their house in order, then brokers, and then the changes will filter through to corporates, said one panelist.
The conference tagline this year is ‘the ascent of IR’, highlighting the continued growth in the profession’s stature. This theme tied in with the launch of the IR Society’s IR Diploma (DipIR), a new qualification on offer to senior IR professionals. Following a pilot, the DipIR will now be made available to individuals who have already completed the IR Society’s more junior Certificate of IR and have at least five years’ experience in IR or a related field.
Lloyd-Seed said he hopes the new diploma becomes the de facto qualification for those who want to be at the top of the industry. The syllabus includes a module on ‘ethics, including managing conflicts of interest’ – a good topic for IROs to bone up on given the lack of trust in business and politics outlined during the day.
