What is the shape of Investor Relations in Asia & beyond?
Investor Relations (IR) is a key part of opening up a company to the outside world, helping to forge relationships and partnerships and ensure any potential investors are well-equipped to make informed decisions. A recent study by VMAGROUP looked at the state of IR in Asia and discovered some interesting findings which may help us to understand IR not only in Asia but on a global scale. Given the importance of attracting investors and feeding senior management crucial information about the state of IR, it is no wonder that the results of the study reflect the discipline’s crucial importance.
Close senior relationships
One of the findings of this study was just how highly IR professionals are regarded by senior management, so much so that IR was seen to be the most likely to report and consult directly with the CEO out of all departments of a company. This reflects just how important companies hold current and potential investors and shows the influence investors have over a company.
An important part of a company
In addition to the sway that many IR professionals believe they have over senior leadership, the importance of IR is further evident in the amount of time CEOs spend working on IR-related activities. 20% of IR professionals reported that their CEOs spend between 7-10 days each month on investor relations, with a further 40% stating it to be 2-3 days each month.
Investments in Asia
A further example of IR’s importance in Asia is the fact that the continent is now the world’s leading recipient of foreign direct investment (FDI), so ensuring that a company is performing optimally in this area is now more important than ever. Despite this, IR teams are still relatively small with the average team being between 2-4 people as only one in six IR professionals reported working in larger teams than this.
Lacking adequate funding
Despite the otherwise healthy state of IR in Asia, it appears that many companies are not providing IR teams with sufficient funding to be capable of performing at an optimum level. A whopping two out of every three participants in the study reported that they believe their department to be underfunded, something which hampers their ability to perform at the highest level.
The future looks bright
One of the questions participants in the study were asked was how they feel about the economy in Asia over the next 12 months. The general optimism in the region is reflected in the fact that 49% reported feeling positive about the economy, a figure significantly higher than 36% from the previous year.
Investment in Asia is booming presently and things look like staying that way for the near future. With so much foreign investment coupled with booming domestic markets, it may be that other areas of the globe do not perform as well as they should do with so much investment going straight to Asia.