Today’s investor relations teams have a challenge on their hands. Can they marshal and distribute the latest key data about their company before anyone else? The consequence of not doing so is that the communication initiative is lost. And with that can go credibility, trust and transparency. But data, in the form of ‘Big Data’, is everywhere and while your data may be proprietary to you and secure on your company servers, there are algorithms constantly being developed that can analyse daily events and come close to simulating your information through the power of artificial intelligence (AI). So how do IR teams set the agenda, and what are the threats and opportunities in the emerging tech of tomorrow?
A clue to part of the answer lies in the job title – a large part of IR work is building relationships, internally and externally, through good times and bad, and gaining a reputation for integrity. The more an IRO’s output is driven by the corporate strategy, and a board’s consistent application of it, the stronger those relationships will be. And in our connected world, they can be maintained 24/7 by a clear IR section on the company’s website.
The internet has transformed IR work along with almost every other area of commercial activity. Not every IR innovation has taken off, though. According to Citigate Dewe Rogerson’s last Annual Investor Relations Survey, IR apps have significantly diminished in usage as have virtual AGMs (perhaps partly due to the Investment Association advising against virtual-only AGMs). On the other hand, the use of online investor targeting tools and explanatory videos on corporate websites have retained their popularity. In part, this points to the human engagement factor: a video is intrinsically engaging and can be an undemanding way to receive information, especially when combined with well-managed social media alerts (high engagement), whereas IR apps tend to be specific to a particular company, so there is an immediate disincentive to use them as each will operate in a different way (low engagement).
So IROs need to add another string to their bow – that of digital communications expert.
Horizon scanning shows no likelihood of this diminishing. In fact, other technologies will need to be mastered and managed. Virtual reality (VR) is a technology yet to find mass take-up (although tech analyst firm IDC has predicted global sales rising from over eight million headsets in 2019 to more than 36 million by 2023, with over half of those being bought by the business market), but it already has interesting niche applications in, for example, training medical staff to carry out intricate procedures or in allowing those employed in hazardous environments to practice, virtually for real, manoeuvres and techniques new to them.
Imagine the potential for such technology at a capital markets day. Rather than put up yet more PowerPoint slides, you could convey the analysts and investors to a virtual world and let them see and hear your new manufacturing site or proposed theme park and its rides in action. This, in fact, was how investors at a recent Babcock International capital markets day were given an immersive tour of one of the company’s state-of-the-art warships. Such a trip may well not have been possible in the real world for time, other logistical or security reasons. But in VR, there are not the same constraints nor any investor transport or off-site catering to organise; cost savings can be significant and your carbon footprint will be a little lighter than it would have been, particularly where overseas trips are concerned.
Whether in biotech, IT, manufacturing, retail, property development or the already mentioned health and hazardous industry areas, VR has the potential to make a powerful contribution to your investment case. And as MiFID II shows that it’s more important than ever to own and tell your investment case story, those who start planning for VR’s implementation now, will be best placed to reap the rewards.
If you would like to know more about how you could better embrace digital communications or emerging technologies such as VR in your investor relations, please get in touch at firstname.lastname@example.org