Sector: Corporate Affairs

An investor perception study is a proven method of gaining quantitative and qualitative insights from investors. A perception study seeks honest opinions and insights and identifies areas of concern from investors so that the company could update its strategy and tactics accordingly to better serve its customers, investors and key stakeholders and potentially achieve better valuation in the capital markets.

Logistics of an investor perception study

Audience

An investor perception study targets an issuer’s institutional audience in the capital markets, including current and previous investors as well as sell-side analysts. Ideally, an investor perception study might even reach out to potential investors and analysts who are involved with peer companies but not the issuer itself. However, given the regulatory and staffing changes in the industry, less people are being asked to do more. The appetite and willingness to participate in an investor survey is much less these days, especially among those who do not have a direct relationship with the company. That being said, a study should at least include current shareholders and sell-side analysts who cover the company.

Building a questionnaire

There are four general areas of questions in a typical investor perception survey; 1) core strategy and business model – questions that are meant to identify investor awareness and understanding of a company’s fundamentals; 2) financial performance and share valuation – questions that are meant to gauge investor satisfaction with execution and their read on share valuation; 3) IR performance – questions that look at the bigger picture of IR, but also at the nitty gritty; and 4) specific topics – if the company is undertaking major projects or trending topics such as ESG and leadership diversity.

Transparency is key

An investor perception study is typically done by a third-party such as an IR agency. Using an intermediary preserves investor honesty and transparency, which is critical to create value from study results and ensure that management hears what they need to and not what they want to from investors.

Benefits of an investor perception study

1) Update strategy and business model: results from an investor perception survey typically are expected to show that investors understand and agree with a company’s overall strategy and business model. There may be specific areas within the overall strategy that investors take issues with, and the study alerts management of these topics so they can better address them. For companies contemplating major undertakings (M&A, delisting, etc.) or in turnaround situations, real-time insights from an investor perception study can be even more helpful in helping management re-think and re-evaluate the situation. It’s not unheard of that a major project can be called off or delayed for a future time if results of the investor perception study are overwhelmingly negative and against the original plan.

2) Identify valuation detractors: if management believe the company’s shares are undervalued, they should most certainly ask investors as part of the perception study and make sure to ask investors for their reasonings either way. What happens next is a win-win situation for the company – if investors agree with management, they will tell management why they think the shares are undervalued. If investors do not believe the shares are undervalued, they will tell management that it’s because new markets are having a hard time taking off or because there is a lack of progress on asset sale and deleveraging. Whatever the case may be, management gain key insights into what investors think about the company’s current valuation.

3) Improve IR strategies and tactics: an investor perception survey can be quite detailed when it comes to asking investors for their opinions of a company’s IR program – asking investors how they feel about the effectiveness of the overall IR program, how investors feel about disclosure of earnings releases, timing of the earnings releases, whether management is making enough efforts being on the road meeting with investors or attending investment conferences etc. These data points are tremendously valuable and help the IR department and management to work together and improve their IR program post study.

4) Learn about your peers: an investor perception questionnaire can be designed to directly compare a company against its peers across a variety of topics and metrics so that management have a better context to judge how they perform over time, both internally and against other players in the space. In addition, investors sometimes make valuable observations about how peers run their business or communicate with investors, which management may have previously been unaware of and could choose to emulate and incorporate as a result of the study.

5) Talk amongst yourselves: findings of an investor perception study can serve as great starting point of internal discussion between IRO, management and the board of directors on issues relating to operations, financials or investor communications and upon which they can improve. Throughout the year, such internal discussions tend to be limited to financial or annual reporting. By doing an investor perception study, a company gives itself additional opportunity to reflect, discuss and strategize for better future outcomes.

In 2016, NIRI (National Investor Relations Institute) commissioned a report on measuring IR program success. Covering 515 IR professionals from company industries, the report ranked perception studies as the second most important metric IR professionals and management at large and mega cap companies used to measure the success of their IR program. For micro and small cap companies, perception studies were also a top five key metric of success.

As mid-year approaches, management should consider planning and conducting an investor perception study to learn about what investors really think about your business, valuation of your shares and your competitors and how you can improve going forward.

When was your last investor perception study?

Grayling NY has over 30 years of experience planning and executing investor perception studies for issuers across market cap sizes and industries. In particular, we are experts at conducting studies for companies with a global shareholder base. If your company needs help with your investor outreach or is getting ready to jumpstart your first investor perception study, do not hesitate to contact Lucia Domville, Managing Director Grayling New York.

Non-deal roadshows – where companies talk to investors even when they aren’t going public – are a proven method of enhancing communications with investors. As first quarter reporting is well underway, management should consider planning and executing a non-deal roadshow, either in person or virtually, to address investors’ questions and share the outlook for your company in yet another atypical year.

Primer on non-deal roadshows

A non-deal roadshow is an investor relations program during which management meets investors not for the purpose of selling securities, but simply to talk about topics of interest such as company milestones, financial results, products, research and development, customer relations, human resource, guidance, etc. The goal of a non-deal roadshow for management is to effectively communicate the highlights and investment propositions of the company so current shareholders can follow the story more closely and potential investors become interested in eventually purchasing your shares.

Pre-pandemic, non-deal roadshows mostly took place at investment centers around the world. Over the last fourteen months, many such roadshows have taken place virtually. Both management and investors have come to appreciate the convenience, flexibility, and cost efficiency of virtual roadshows, as well as the opportunity to greatly expand the potential audience base. Despite the progress in vaccination and gradual increase in business travel, we anticipate that non-deal roadshows will likely take on a hybrid approach of traditional and virtual roadshows existing side by side going forward.

Logistics of non-deal roadshows

Typically, management would work with either an investment bank or external IR agency to run a non-deal roadshow. While an investment bank tends to arrange roadshow meetings based on its own portfolio of clients, an IR agency has unconstrained access to potential investors as long as they match what management is looking for.

After the time and location are set, the key to a successful roadshow is to identify potential investors that could be good fit for the company in criteria such as industry category, market cap (large cap, mid cap, small cap), investment style (GARP, growth, value), peer ownership, etc. A non-deal roadshow could have as little as three meetings or thirty meetings, depending on availability and interest level from investors. In most cases, the number of meetings average 15-20 per week, unless the roadshow includes breakfast or lunch group meetings.

Roadshow meetings usually come in two forms – one-on-one meetings are more personal and allow investors to converse directly with management, while group meetings are better suited for investors who appreciate the opportunity to not only hear from management but also learn how others think about a particular company. Either way, these meetings represent invaluable opportunity for investors to learn and analyze investment targets beyond what is available on company press releases and filings.

7 benefits of non-deal (virtual) roadshows

1) Keep investors updated: fresh off quarterly reporting, non-deal roadshows give management the opportunity to clarify any areas of doubt and make sure that investors fully understand the results and the company’s strategy going forward.

2) Keep investors engaged: non-deal roadshows provide an avenue through which management can interact with top institutional shareholders. Yes, management is likely to be in regular email contact with investors. Roadshows are dynamic and personal way to engage with investors that often include a wider range of topics of discussion and a wider cast of participants. All of which is to build and ensure healthy relations with investors.

3) Meet new investors: non-deal roadshows are a powerful tool with which management can proactively reach out to potential new investors. With virtual roadshows, management has the opportunity to interact with investors in parts of the world that might otherwise be difficult for them to reach via on-the-ground roadshows. In addition, some investors keep a low profile and choose not to attend public investor conferences. Hence, non-deal roadshows greatly increase the geography and pool of capital that a company can access.

4) Gain valuable feedback: after telling more or less the same version of the company’s story to various investors, management will receive opinions and perspectives from investors, with which management can gauge the effectiveness of their communication and think of ways to refine specific story angle for the future.

5) Maximize your time on the road: in-person investment conference eventually will make a comeback. Non-deal roadshows are a great way to maximize management’s time on the road by allowing them to meet with additional investors in the same city or neighboring cities or states who are not attending the conference management is going to.

6) More resources at hand: in addition to lower cost and larger audience base, virtual non-deal roadshows also come with the advantage of allowing management to have more personnel and resources available while they conduct the roadshow from their office. That way, management is able to better address investor questions in real-time instead of having to resort to “let me get back to you on that later”.

7) Build trust: roadshows are helpful in building trust between investors and management, especially for those who are located in different countries or even continents and may not see each other often. As convenient as emails and modern communications tools are, the human touch of being in the same room, shaking hands and conversing will always retain its value.

When was the last time your company did a non-deal roadshow?

Grayling New York has over 30 years of experience planning and executing hundreds of non-deal roadshows for issuers across market cap sizes and industries. In particular, we are experts at running roadshows for international companies seeking to access the U.S. or European capital markets. If your company needs help with your investor outreach or is getting ready to jumpstart your first non-deal roadshow, contact us now at newyork@grayling.com.

How are businesses of all sizes responding to the changing values of our time? At Grayling, we asked 500 senior business decision-makers across Europe about their organisation’s purpose. The results indicate a shift away from the economist Milton Friedman’s vision of business existing solely to increase profits towards one more akin to the benevolent philanthropy of Victorian industrialists. What does this mean for your organisation in the era of ‘New Collectivism’? Tom Nutt, Grayling’s Head of Corporate, UK & Europe, shares his thoughts.

In 1970, Milton Friedman stated that businesses’ main social responsibility was to increase profits. This economic thinking peaked arguably in the 1980s with a ‘greed is good’ culture that was captured so well by the 1987 film, Wall Street.

Fast-forward to the present in a world slowly emerging from a disruptive year of lockdowns and we’ve learned that the pandemic has accelerated movements that were already active, with racism, gender equality and the environment as key themes. Younger generations are rejecting the status quo and spending their money with brands with a purpose beyond profit.

What business leaders tell us about purpose

At Grayling, we wanted to see how business leaders defined their organisation’s purpose in a post-pandemic world. In early 2021, we canvassed 500 senior decision-makers from across Europe*. We found that just a third (32%) of senior decision-makers across Europe believe that the sole responsibility of business is to maximise profits without breaking the law.

However, the majority (63%) believe that – alongside making a profit – businesses have a collective responsibility to the societies they operate in. Just 17% of micro-business owners believe that making a profit is the sole objective of business. We outlined our findings in our New Collectivism Report.

The pandemic has highlighted several societal and economic factors that were already in play, and three in ten (29%) of business decision-makers that we surveyed say they expect communication around COVID-19 to limit conversations around sustainability during 2021. A much smaller number (14%) say they feel pressure from customers, consumers or governments to move more quickly on ethical issues than is possible at the moment.

A fast-changing dynamic is forcing a rethink

The demographics of business are changing. Younger, tech-native Generation X and Millennials are rising through the ranks into positions of power, and we can expect them to bring a new management style that includes a purpose beyond profit. At a political level, younger politicians in Finland and New Zealand are indicative of this move, supported by a new progressive administration in the White House.

A politically active younger generation, invested in social and environmental movements, are voting with their e-wallets by buying from companies whose ethics and purpose they align with. Young talent also wants to work for progressive employers, with competitive benefits beyond the salary. Businesses must keep up. They must find a purpose beyond profit and vocalise it in an authentic way, not with greenwashing or tokenism that can be called out in an instant on social media.

The nascent era of ‘New Collectivism’ is a huge opportunity for organisations of all sizes to reassess their purpose and what kind of conversations they want to lead going into the future. This new direction must filter throughout the organisation from a cultural perspective and will impact everything from the products and services you offer, to your messaging, your human resources policies and your recruitment strategy.

If this is a challenge you recognise within your organisation, Grayling can help. We provide a wide range of expert communications services across Europe, including public affairs, public relations and digital communications.

We would be delighted to talk, so please drop me an email or download the report here.

*Study conducted of 500 senior business decision makers in international businesses across micro (1-9 employees, small (10-49 employees), medium (50-249 employees) and large corporations (250+ employees). Field study conducted 3-8 Feb 2021 by Opinium Research.

Wie reagieren Unternehmen aller Größen auf den Wertewandel unserer Zeit? Bei Grayling haben wir 500 Führungskräfte aus ganz Europa über den Zweck ihres Unternehmens befragt. Die Ergebnisse zeigen eine Verschiebung weg von der Vision des Ökonomen Milton Friedman, wonach Unternehmen ausschließlich zur Gewinnsteigerung existieren, hin zu einer Vision, die auf philanthropischen Prinzipien beruht. Was bedeutet diese neue Wir-Kultur, dieser „Neue Kollektivismus“, für Ihr Unternehmen? Ein Blogbeitrag von Tom Nutt, Head of Corporate, Grayling UK & Kontinentaleuropa.

1970 erklärte Milton Friedman, dass die wichtigste soziale Verantwortung von Unternehmen darin bestehe, die Gewinne zu steigern. Dieses ökonomische Denken gipfelte wohl in den 1980er Jahren in einer „Gier ist gut”-Kultur, die in dem Film „Wall Street” von 1987 so treffend eingefangen wurde.

Springen wir zurück in die Gegenwart in eine Welt, die sich allmählich von einem disruptiven Jahr der Lockdowns erholt. Die Pandemie hat Strömungen gestärkt, die bereits davor präsent waren – mit Anti-Rassismus, Gleichberechtigung der Geschlechter und dem Klimaschutz als Hauptthemen. Jüngere Generationen lehnen den Status quo ab und geben ihr Geld bei Marken aus, die einen Zweck jenseits des bloßen Profits verfolgen.

Was Führungskräfte über sinnstiftendes Handeln sagen

Wir von Grayling wollten herausfinden, wie Unternehmenslenker*innen den Zweck ihrer Organisation in einer Welt nach der Pandemie definieren. Anfang 2021 befragten wir deshalb 500 Führungskräfte aus ganz Europa*. Wir fanden heraus, dass nur ein Drittel (32 %) von ihnen glaubt, dass die einzige Verantwortung der Wirtschaft darin besteht, im Rahmen des Gesetzlichen Gewinne zu maximieren.

Die Mehrheit (63 %) ist der Meinung, dass Unternehmen – neben der Gewinnerzielung – auch eine kollektive Verantwortung für die Gesellschaft haben, in der sie tätig sind. Nur 17 % der Kleinstunternehmer*innen glauben, dass Gewinne zu erzielen ihr einziger Unternehmenszweck ist. Die Ergebnisse der Umfrage haben wir in unserem Whitepaper mit dem Titel „New Collectivism Report“ zusammengefasst. Dieses Whitepaper steht hier kostenlos zum Download bereit.

Die Pandemie hat mehrere gesellschaftliche und wirtschaftliche Faktoren deutlicher sichtbar gemacht, die bereits zuvor im Spiel waren. Drei von zehn (29 %) der von uns befragten Führungskräfte erwarten, dass die Kommunikation rund um COVID-19 die Gespräche über Nachhaltigkeit im Jahr 2021 einschränken wird. Eine viel geringere Anzahl (14 %) sagt, dass sie Druck von Kunden*innen, Verbraucher*innen oder Regierungen verspüren, sich in ethischen Fragen schneller zu bewegen, als es derzeit möglich ist.

Eine hochdynamische Entwicklung, die das Umdenken beschleunigt

Die Demografie der Führungsetage in der Wirtschaft verändert sich. Jüngere, technikaffine Menschen der Generation X und Millennials steigen in Führungspositionen auf. Wir können davon ausgehen, dass sie einen neuen Managementstil mitbringen, zu dem ein Zweck – ein Sinn – jenseits des Profits gehört. Auf politischer Ebene ist der Erfolg jüngerer Politiker*innen in Finnland und Neuseeland ein Kennzeichen dieser Entwicklung, die t von der neue progressive Regierung im Weißen Haus ebenfalls gestützt wird .

Eine politisch aktive jüngere Generation, die in soziale und ökologische Bewegungen investiert, stimmt mit ihrem virtuellen Portemonnaie ab: Sie kauft bei Unternehmen, deren Ethik und Zweck sie unterstützt. Junge Talente wollen auch für fortschrittliche Arbeitgeber arbeiten, die wettbewerbsfähige Leistungen jenseits des Gehalts bieten. Unternehmen müssen Schritt halten. Sie müssen einen Zweck jenseits des Profits finden und diesen auf authentische Weise zum Ausdruck bringen, nicht mit Greenwashing oder Alibi-Maßnahmen, die in den sozialen Medien im Handumdrehen enttarnt werden können.

Die aufkommende Ära des “Neuen Kollektivismus” ist eine riesige Chance für Organisationen aller Größen, ihren Zweck und ihre Kommunikation einer genauen Analyse zu unterziehen. Eine Neuausrichtung muss sich aus kultureller Sicht durch die gesamte Organisation ziehen und wird sich auf alles auswirken, von den Produkten und Dienstleistungen, die Sie anbieten, bis hin zu Ihrem Messaging und Ihrer Personalpolitik.

Wenn eine solche Evaluierung und Neuausrichtung für Ihre Organisation oder Ihr Unternehmen relevant ist, kann Grayling helfen. Wir bieten eine breite Palette an fachkundigen Kommunikationsdienstleistungen in ganz Europa an, einschließlich Public Affairs, Public Relations und digitale Kommunikation.

Wir freuen uns auf ein Gespräch! Kontaktieren Sie bitte Michaela Gross, Grayling Deutschland, oder Moritz Arnold, Grayling Austria.

*Umfrage unter 500 Führungskräften in internationalen Unternehmen in den Bereichen Kleinst- (1-9 Angestellte), Kleinunternehmen (10-49 Angestellte), Mittelgroße Unternehmen (50-249 Angestellte) und Großunternehmen (250+ Angestellte). Die Befragung wurde vom 3. bis 8. Februar 2021 von Opinium Research durchgeführt.