Relationship Matter. They really do

This was the clear message that resonated throughout my conversation with Douglas Radcliffe, Head of Investor Relations at Lloyds plc and Chair of the Investor Relations Society, and Michael Stiasny, Equity Fund Manager and Head of UK Equities at M&G, who has managed money for nearly 30 years. This engaging panel discussion titled "Enhancing Investor-Company Dialogue." was a joint event between the IR Society and the Investor Forum which brought together two veterans in the industry as well as many other companies, investors and advisors.

Building Relationships in a Challenging Landscape

Both Douglas and Michael emphasised the importance of working diligently to build relationships, noting that it is more challenging than ever. Despite these challenges, both investors and companies share the same objective: meaningful and effective dialogue. While there is a role for advisors and intermediaries, it is crucial to remember that these relationships are supplementary to the primary relationship between companies and investors.

Douglas shared his perspective that Investor Relations (IR) is fundamentally a relationship-focused business where meaningful and effective dialogue is critical to building trust. This trust is not established through a one-way communication channel; it requires a two-way relationship and continuous feedback loop. Companies must not only communicate with investors but also actively listen and engage, understanding that each investor has unique requirements and objectives.

Understanding Investors

Understanding what investors want can be challenging. Michael highlighted how changes in the market over the last 30 years have impacted investors. Institutions are now much more global, and the focus on UK equities has diminished. Additionally, there is an intense focus on fund performance with increased transparency and increasing client expectations. Investors are extremely time-poor and under relentless pressure, with fewer people managing more funds. This dynamic necessitates a deeper understanding and more tailored approach to engagement.

Practical Insights for Effective Engagement

Throughout the discussion, both Douglas and Michael reiterated the importance of understanding the purpose of any engagement between investors and companies. They reminded us of the simple, yet essential principles of effective communication and collaboration:

1. Take Time to Understand One Another: Allocate time to genuinely understand the perspectives and interests of the other party.
2. Ask Questions and Listen Attentively: Engage in active listening and ensure that all voices are heard.
3. Know Who Will Be Present: Understand who will be attending and their specific interests in any meeting.
4. Respect Everyone's Time: Value the time of all participants, especially management, by being concise and to the point.
5. Allocate Time for Feedback: Ensure there is time set aside for providing and receiving feedback.

The Role of Human Relationships in Capital Markets

At the end of the day, capital markets are a mechanism for allocating capital. Despite technological advancements and the rise of AI, Douglas and Michael both agreed that there will always be a critical role for human relationships. These relationships are foundational to building trust and ensuring effective dialogue between investors and companies.

Final Thoughts

Strong investor-company relationships are more important now than ever. This event reinforced that meaningful dialogue, built on mutual understanding and respect, is key to navigating the complexities of today’s capital markets.

Let’s continue to work together, ask the right questions, and listen carefully to build a collaborative and effective community dedicated to making the UK markets thrive.

This panel discussion builds on Shaping Tomorrow's Dialogues: Bridging the Gaps between Companies and Investors report that was recently published by the Investor Forum (https://lnkd.in/efWPdayw) The report examines four key dialogues critical to the relationship between companies and investors: Investor Relations, Governance and Voting, Audit and Assurance, and Sustainability.