IRPAS survey: Investor relations gaining importance amongst Singapore corporations

  • Over two-thirds of Investor Relations Officers (“IROs”) attend C-suite management meetings, reflecting importance of the Investor Relations (“IR”) role
  • 94% of large and mid-cap companies have a dedicated IR office or IRO, compared to 32% of small-cap companies
  • 75% of companies without a dedicated IRO said the function is performed by CFO
  • IRPAS and SGX are committed to jointly promoting best practices and elevating the IR profession in Singapore

Singapore, 10 December 2013 The IR function and the IR role are seen as increasingly important across listed companies in Singapore, although functional responsibilities vary amongst companies with different market capitalisations.

This is the overall conclusion drawn from the findings of The Role of Investor Relations in the Modern-day Corporation, a collaborative survey conducted by the Investor Relations Professionals Association (Singapore) (“IRPAS”) and Singapore Management University (“SMU”), supported by the Singapore Exchange (“SGX”), to examine the role of IR and IROs in today’s modern corporation. The survey aims to provide insights into the structure and organisation of the IR function in Singapore-listed companies as well as the roles and responsibilities of IROs in these organisations.

An online survey was conducted from August to September 2013 with IROs (or officers responsible for the IR function) of SGX-listed companies from across industries and of various market capitalisations.

 

Rising importance of the IR function

According to the survey, over two-thirds (69%) of IROs attend C-suite management meetings in their organisations, reflecting the importance of the IRO appointment in Singapore-listed companies.

Significantly, 94% of large and mid-cap companies have a dedicated IR office or IRO, while only 32% of small-cap companies have the same. Among organisations that do not have dedicated IR resources, 75% said that the IR responsibilities are adequately performed by an existing officer of another function, usually the Chief Financial Officer, while others outsource it to external IR firms.

 

Large and mid-cap vs. small-cap companies

The survey found that the roles and responsibilities of IROs vary significantly between large and mid-cap companies versus small-cap companies.

Among large and mid-cap companies, over 90% of IROs consider communication and liaison with financial analysts and investors their key roles and responsibilities. Supporting that is the fact that over 50% said they spend most of their time on communicating key corporate developments to the market, and liaising with analysts and investors.

IROs of large and mid-cap companies also reported that they hold a more diverse portfolio of other responsibilities including developing, implementing and managing IR programmes, providing feedback to senior management, monitoring and summarising analyst reports and organising investor events.

In comparison, 78% of IROs in small-cap companies indicated managing quarterly/ annual earnings press releases and the production of annual reports (and other compliance reports) as their key roles and responsibilities; and it is in these activities that they are most engaged.

 

Challenges and Key Performance Indicators (KPIs)

 When asked to rank IR functions which they find most challenging, the top three functions cited by the IROs are (in descending order of importance):

  • communicating with institutional shareholders,
  • communicating with investors on key developments in the organisation, and
  • establishing an optimal mix and type of shareholders through various initiatives.

Across the board, IROs said that their most important KPIs are the ability to retain and attract institutional investors as well as increase the market valuation of their organisations. These are followed by the ability to increase analyst coverage and market liquidity of their organisations’ stock.

Mr Magnus Böcker, Chief Executive Officer of SGX, said, “The survey results provide valuable insights into the role of IROs and challenges faced by Singapore’s corporations today, echoing our belief in the importance of Investor Relations. A well-executed Investor Relations programme ensures that companies are better positioned to compete for the attention of investors both in Singapore and globally. Clearly, there are opportunities for companies to focus on enhancing the role of IROs.”

Mr Harold Woo, President of IRPAS, noted, “In an increasingly competitive business environment where investors are faced with multiple investment options, effective and timely communication is crucial to an organisation’s reputation and valuation. With a growing focus on corporate governance, transparency and accountability amidst an increasingly stringent regulatory environment, IROs also need to equip themselves with the relevant knowledge and skills to effectively discharge their duties.”

 

Developing investor relations in Singapore

To this end, IRPAS was established in 2006 as the professional body for IR practitioners in Singapore. Providing the platform for dialogue between companies, regulatory bodies and the investment community, IRPAS aims to champion IR best practices, enhance the professional competencies of IROs and elevate the overall standard of the IR profession in Singapore.

Mr Woo commented, “As a voluntary institution run by IR professionals for IR professionals, IRPAS strives to raise the quality standards of Investor Relations as the industry matures. We are constantly working to improve our offering – including the Certificate in Investor Relations, training courses, and opportunities for the IR community to meet and share best practices – in order to equip IROs with the expertise and network to thrive in today’s fast changing environment.”

Mr Böcker said, “As an exchange, we know full well the importance of operating a marketplace whereby there is investor trust in listed companies. We therefore strongly encourage companies to proactively engage their shareholders and support them in this area by sponsoring the efforts of IRPAS. SGX also offers companies, through our corporate services, a comprehensive suite of global investor outreach programmes which will enhance their corporate profile and raise their visibility with global investors.

“With strength in numbers and collective wisdom, we look forward to greater participation from more companies as we work together as a community to raise the standing of the IR profession in Singapore”, Mr Böcker concluded.

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About IRPAS

IRPAS was established in 2006 by leading investor relations (IR) practitioners, supported by the Singapore Exchange (SGX), with the primary objectives of championing IR best practices, enhancing professional competencies and elevating the overall standard of the IR profession in Singapore. Run by IR professionals for IR professionals, IRPAS is a voluntary commitment by a team of IR veterans united by the same dedication to build a community for IR professionals, empower members through education, professional development and networking initiatives, and to facilitate the sharing of IR knowledge and best practices through internally-driven research as well as in partnership with prestigious institutions. IRPAS aims to represent the views of its members, and provides the platform to facilitate dialogue among the IR fraternity, regulatory bodies and investment community.

IRPAS has approximately 200 members comprising representatives from companies listed on the Mainboard and Catalist of SGX covering a spectrum of geographies, industries and market capitalisations, leading private institutions, as well as IR advisors and service providers in Singapore and the region. For more information, please visit http://www.irpas.com.

 

About Singapore Exchange (SGX)

Singapore Exchange (SGX) is the Asian Gateway, connecting investors in search of Asian growth to corporate issuers in search of global capital. SGX represents the premier access point for managing Asian capital and investment exposure, and is Asia’s most international exchange with more than 40% of companies listed on SGX originating outside of Singapore. SGX offers its clients the world’s biggest offshore market for Asian equity index futures, centred on Asia’s three largest economies – China, India and Japan.

In addition to offering a fully integrated value chain from trading and clearing, to settlement and depository services, SGX is also Asia’s pioneering central clearing house. Headquartered in Asia’s most globalised city, and centred within the AAA strength and stability of Singapore’s island nation, SGX is a peerless Asian counterparty for the clearing of financial and commodity products. For more information, please visit www.sgx.com

For media enquiries and more information, please contact IRPAS Secretariat:

Tulchan Communications, (65) 6222 3765

Jean Zhuang, jzhuang@tulchangroup.com, (65) 9061 1075