LINK Asset Services is of the opinion that investor relations is currently being significantly expanded towards stronger stakeholder relations. This is due on the one hand to global developments in the area of corporate governance. According to the authors, the Corporate Governance Code has undergone major reforms in Germany and Belgium. Another aspect that is causing IR work to swell more and more is the growing interest of investors in ESG. The additional burdens for the IR team in the ESG area alone can be enormous. Whether questionnaires from ESG rating agencies, writing sustainability reports or sustainability roadshows – simply gathering the necessary information can sometimes pose difficulties for an IR team.
The authors also see the challenges posed by shareholder activism, which can put the management of a company under pressure through massive demands – also in the area of corporate governance. A typical activist shareholder tries to use his equity stake to achieve certain goals, bring about change and influence the behaviour of a company by influencing other shareholders or using his voting rights. LINK Asset Services expects this trend to continue in 2020.
The alignment and thus further expansion of regulations – especially in the EMEA region – lead to a further intensification of investor relations work. Challenges arise, for example, from the Shareholders’ Rights Directive, an update of the Stewardship Code in the UK, new laws in the area of employee representation in France, the trend towards corporate purpose, i.e. the setting of higher goals and a deeper sense of enterprise as well as legislation in the M&A area. Further adjustments have been made in the area of overboarding.
All these developments present IR with an increasingly complex and demanding range of tasks.
The summary is based on a press release from LINK Asset Services. No liability is taken for the summary or the translation. We refer you to the original report, which can be downloaded HERE.