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IR In The Time Of Coronavirus – Part 2

IR In The Time Of Coronavirus
10 March 2020
IR Ai Tempi Del Coronavirus – Part 3
6 May 2020

IR In The Time Of Coronavirus – Part 2

  • Investors avoid conferences but remain open to meetings amid Covid-19 spread

  • The Implications for AGMs – Deadlines and consequences of an AGM postponement

 

We focus your attention on two articles, one from EQS Group and another one  form the IR Magazine 

 

Trade fairs and conferences are being cancelled. Companies are placing restrictions on business trips and many are banning them altogether, asking their employees to work from home or to self-quarantine. One coronavirus case at a company can create turmoil and is hard to prevent.

Working from home during the corona crisis

Alternative forms of work such as remote working are seeing a boom and should help to minimize the risk of infection among employees. However, those at management level have responsibilities to their employees alongside ensuring the company’s performance. For instance, the UK Advisory, Conciliation and Arbitration Service (ACAS) provides information on the duties of employers when asking their staff to work from home.

 

Survey of European institutions finds more than half are banned from international travel

Most European investors have stopped attending conferences but a significant number remain open to meetings despite the rapid spread of coronavirus, according to research by Phoenix-IR, a corporate access firm. The survey, which polled the views of European institutional investors between March 11 and March 12, finds that 76 percent of respondents say they are no longer attending investment conferences.

But while Europe is now considered the epicenter of the coronavirus pandemic and countries are imposing strict controls on movement and social contact, the majority of respondents are still conducting in-person meetings with companies.

Of the investors polled, 60 percent say they are still hosting one-on-ones in their offices, while around half (49 percent) are attending company group breakfasts and lunch meetings.

The survey heard from 80 investors based in Europe, who collectively manage around $2.5 tn in assets under management. The biggest proportion of respondents are based in the UK, followed by Switzerland. 

European investment firms have been increasing restrictions on employees as the coronavirus outbreak spreads, although each firm is approaching the situation in its own way. ‘Many of the bigger institutions were the first to suspend face-to-face meetings,’ says Adrian Rusling, founder of Phoenix-IR.

The coronavirus outbreak has forced the postponement or cancellation of many European conferences, while others are converting to virtual-only events. Those affected include Credit Suisse’s 2020 European Banks Conference and Goldman Sachs’ Disruptive Technology Symposium.

The survey also finds 73 percent of respondents are no longer taking part in reverse roadshows and 54 percent have had international travel suspended by their firms. The number of investors unwilling or unable to travel will have risen again over the weekend following the implementation of new controls on movement across various countries.

In Spain, the government announced a state of emergency and banned people from leaving their homes for two weeks except for essential journeys, such as to buy food or visit hospital. Meanwhile, France announced the closure of non-essential services such as restaurants and cinemas.

Various countries also strengthened border controls. Among the measures, the US said it would extend its ban on visitors from the European Schengen Area to cover the UK and Ireland.

For companies wondering how to remain in contact with their shareholders during the coronavirus outbreak, the research suggests that investors are happy with low-fi forms of technology. When asked to pick between the telephone and video for talking with companies, 67 percent of respondents selected the phone. This choice is partly down to ‘the perceived technical and logistical barriers to setting up’ video calls, notes the survey.

Companies and Investors are still communicating; they’re just not traveling for the moment.

 

The Implications for AGMs – Deadlines and consequences of an AGM postponement

Investor relations departments are facing a major challenge. The annual reporting period is beginning during this pandemic. In addition, companies are getting ready for their AGMs. While it is possible to broadcast the annual press conference exclusively on the Internet without offering an accompanying in-person event, this option is not (yet) available for AGMs.

Whether these major events, which are a legal obligation, can take place as planned in view of the coronavirus spread is something that nobody can answer at the moment. What we do know is that many countries have ordered that meetings and events bringing people together should be cancelled.

ESMABusiness as usual

The European Securities and Markets Authority (ESMA) has stressed, among other things that in light of the corona crisis financial market participants should be ready to apply their contingency plans including deployment of business continuity measures, to ensure operational continuity in line with regulatory obligations. Issuers are still required to meet their obligations, even during these unprecedented times.

It‘s time for hybrid (and maybe more) – So perhaps the time has come for a new approach – giving shareholders either the option to join online from wherever they are in the world, or to attend the physical, in-person meeting. In reality this may mean that the physical meeting still goes ahead as originally envisaged but that the majority of shareholders attend online. It’s possible that companies may need to conduct entirely virtual meetings which, while under normal circumstances could lead to legal issues. This might be the only option during this ever-changing period.

In any case, companies should do everything possible to ensure that the shareholders’ meeting is conducted in line with regulations. Hybrid and in some instances fully virtual AGMs should be seriously considered.

 

In my Blog “Crisis Management: Always a HOT topic” I suggested that in critical situations it is essential to “Communicate with honesty, candor and openness while acknowledging risk”

https://hear-ir.com/ir-blog-crisis-management-always-a-hot-topic-part-1/

https://hear-ir.com/crisis-management-always-a-hot-topic-part-2/

See also IR In The Time Of Coronavirus – Part 1 https://hear-ir.com/ir-in-the-time-of-coronavirus/

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