A new virtual investor relations (IR) platform is being launched just after the corporate watchdog, ASIC, changed its rules to allow companies to hold virtual AGMs to communicate with investors.
The launch also comes off the back of a new report revealing that a substantial proportion of companies are already travelling the virtual pathway in their communication to investors. Eighty (80) per cent of Australian IR professionals prefer digital and virtual channels, with 45 per cent relying on teleconferencing and web conferencing to formally update investors.
The launch of a clean, fully brandable online IR platform by Redback Connect – which designs and hosts AGMs, virtual conferences, and live-streamed company announcements for organisations the likes of Qantas, Downer Group, and Sonic Clinical Services – will offer both a streamlined and feature-rich experience for AGM convenors and attendees alike, particularly those looking to hold virtual AGMs before 31 May.
The platform, Redback IR, enables executive presenters to appear via video or audio feed with supporting resources, while also allowing the organisations to manage commentary, questions, and devoting through an online interface.
Adapting to the new times
At a time when face-to-face AGMs are not a possibility, Redback Connect, in partnership with the Governance Institute of Australia, has also sought to uncover the efficacy of virtual communications in a new report titled ‘Investor Relations: The New Virtual Paradigm’.
Respondents comprised 25 company secretaries, CFOs, and IR professionals across ASX-Listed public companies (45 per cent of respondents), not-for-profits (20 per cent), proprietary companies (20 per cent), and unlisted public companies (15 per cent).
The results revealed that email is the primary communication channel for 30 per cent of respondents. But among those and the 7 per cent who rely most on face-to-face events, 37 per cent said lack of engagement was a problem, 26 per cent said they had challenges gathering questions from investors, and 26 per cent said these channels lacked reporting and data.
It seems a number of those who use email do not track open rates: “We don’t know who has read the information,” one respondent commented.
Social media is the primary channel for 17 per cent of respondents, offering immediacy and engagement – albeit without the control that other channels provide. Direct mail is the least popular channel (13 per cent of respondents), reflecting the move away from print media with its higher costs, longer lead times and unmeasured engagement.
Respondents were also asked about the communications they use when it comes to regular investor relations updates. It is here that the growing digital uptake becomes very evident. Forty-five (45) per cent of respondents use either teleconferencing or web conferencing to perform regular formal IR updates, while 45 per cent still rely on email and websites. Only 5 per cent employ face-to-face methods to update investors.
The survey took an in-depth look at newer investor relations channels. Respondents who used virtual events such as teleconferencing and web conferencing expect technical reliability, visibility and real-time reporting.
Among shortcomings they cited with these channels, 21 per cent experienced delays in receiving reports on participant lists, recordings and transcripts; 21 per cent lacked participant visibility; 18 per cent experienced technical issues; 12 per cent said there was lack of cost transparency; and 12 per cent experienced low operator professionalism.
What do these findings mean?
Jeff Downs, CEO and Founder at Redback Connect, says: “Restrictions on large gatherings, travel, and concerns from investors about attending physical meetings during the COVID-19 pandemic are forcing changes in the way IR, and the communications programs that support it, are being conducted.
“Increasingly, we are seeing organisations opt for digital and virtual channels that can speak to an entire investment community across distance. They provide company executives with the opportunity to present information verbally, with the added engagement that comes of being able to take questions from attendees, to present video and slides, and to conduct polls.”
Jeff adds that ASIC’s recent changes to the guidelines governing how companies must hold their annual AGMs are also contributing to a surge in online investor events.
“The use of robust, feature-rich virtual AGM technology that enables companies to communicate with investors in engaging, cost-effective ways – without contravening social distancing guidelines and travel restrictions – cannot be underestimated.
“The Redback IR platform is a unique example of this. Through this platform, we can help thousands of organisations across Australia and New Zealand deliver virtual AGMs and, in a post-COVID-19 world, I expect a significant increase in the demand for this kind of service.”
Governance Institute of Australia CEO Megan Motto says that the pandemic has meant a hyper-speed shift to virtual meetings with the added challenge of many employees suddenly working from a home environment. “The accelerated transformation forced by the pandemic has brought many challenges, but a great deal of agility and resilience has also been on display from many organisations as they adapt to the changed circumstances.
She adds: “We are seeing trends that were already underway now progressing at lightning speed, and I think our business and communication landscape will be forever changed as a result.”
What should IR professionals keep in mind during COVID-19?
Redback Connect’s five fundamental characteristics IR professionals must deliver in their communication in a social distancing environment:
Organisations and their IR professionals are always very conscious of the need to be accountable to their investor community. This has only become more important in a remote working world, where investors expect similar standards to be maintained via online and virtual channels.
Increased public company scrutiny and the rise of social media and shareholder activism continue to contribute to an always-on approach to investor relations. Digital communications and virtual investor events can support the increased frequency of communications that an active shareholder community demands.
Enabling investors to follow and connect with organisations in whichever channel they prefer is critical to investor relations in the current disrupted communications landscape. Organisations can now connect with large and dispersed investor communities across geographic boundaries, enabling them to open up new investor opportunities potentially.
With restrictions on travel and large gatherings designed to limit the spread of COVID-19, IR professionals must become comfortable and familiar with digital channels and virtual investor events to provide all shareholders with the access and information they need.
In a COVID-19-affected world, the corporate watchdog ASIC considers virtual investor events such as online AGMs now acceptable under regulatory guidelines to enable companies to communicate with investors without contravening social distancing guidelines and travel restrictions.
IR professionals in organisations with a 31 December reporting date may hold hybrid or virtual investor events without fear of being penalised by ASIC, so long as they provide the ability for attendees to fully participate via online Q&As and virtual voting mechanisms, such as polls.
Essential to this is the use of robust, feature-rich virtual meeting technology, such as Redback Connect’s IR platform, which provides the technical support and contingency planning to accommodate the increased load on digital infrastructure in the current climate.
With increased business pressures in the severe economic conditions created by COVID-19, organisations must lift their game when it comes to how they engage and interact with investors online. They need to provide access to video, slides, and other engaging online communications formats and events, as well as the ability to interact with executives.
It should also include tracking the investors that access those resources to gauge areas of interest and commitment – valuable information for any company executive team.
The need for secure IR channels is not negotiable, with organisations preferring confidential channels that offer controlled access to information and events, as well as the ability to monitor and control participant activity. Also important is improved contingency planning, including technology back-up and support in these uncertain times, given the increased load on digital communications infrastructure in a remote working world.