LEAD ARTICLE

In March, two months after becoming IRO at Lion Electric, Isabelle Adjahi encountered the type of technical hiccup that gives IROs nightmares: The conferencing system disconnected her CEO and CFO, leaving 300 analysts and prospective investors with no one to answer their questions.

“The analysts said to me, ‘Isabelle, I need you to jump in and continue the discussion,’” she recalls. Since Adjahi had prepped management, even drafting answers to a variety of possible questions, she didn’t panic. “I could jump in,” she says, “because I had everything in front of me on my screen. I knew what to say and didn’t look stupid.”

Even without a technical snafu, Adjahi finds that interacting virtually is a gift to any IRO in a new role – or any IRO, for that matter, who encounters an unexpected question. Meeting virtually makes it easier to “look smart,” she says. “Face to face, I’d often have to say that I’d check and get back to an investor. Over video, I can check right away, sometimes without anyone knowing because I have all my documents open on my screen.”

Understanding the silver linings of meeting virtually is critical for IR professionals, especially since the need to social distance is unlikely to end in the coming months. According to an online poll by IR Magazine, in early May only 19% of participants expected a return to physical investor meetings in 2021.

Productivity Skyrockets

An argument could be made that the coronavirus pandemic arrived at the exact right moment for IROs and other businesspeople who participate in multiple meetings a week. By early 2020, technology had progressed to the point where professionals could meet virtually – and these virtual meetings even delivered some hefty advantages.

“One way to look at it is that everything that was built over the past 10 years was delivered just in time for the pandemic,” says Darrell Heaps, CEO at Q4 Inc. He explains that the advent of cloud computing and advances in Internet infrastructure, most of which were born of a desire to support error-free Netflix and YouTube videos, made FaceTime and Zoom possible, too.            

When the pandemic hit, Zoom was “a huge saviour” that “set the new bar that everyone raced to reach,” says Heaps. He notes that in early 2020, just as epic numbers of people were turning to Zoom, platforms like Microsoft Teams, Slack, and Webex dramatically upped the quality of their video offerings.

For Heaps, the true gamechanger is the newfound productivity that video offers IROs. He says that an IPO roadshow, which “would basically derail a management team’s time for three weeks,” can now be completed in just three days. In addition, he says, “The number of investors registering for and attending earnings calls and investor conferences is two to three times what it was pre-pandemic.” This improved productivity means that IROs are meeting with large numbers of high-quality investors. What’s more, they can even use some of their time savings to address ESG or other pressing issues that tended to get sidelined because schedules were too tight.

For non-deal roadshows, going virtual means IROs are enjoying a reach they never could have attained when they had to hop planes and travel to numerous destinations. In the past, says Heaps, IROs would travel to Boston to see a key investor instead of meeting with attractive investors in Atlanta and San Francisco. “Reaching all three would mean three separate roadshows,” he says. “But now an IRO can see all three on any given day, all before noon.”

Adjahi agrees. When she was hired in January as Lion Electric’s Vice President, Investor Relations and Sustainable Development, the job interviews and onboarding were all conducted online. Since Lion, a manufacturer of commercial electric vehicles, is going public as a SPAC (Special Purpose Acquisition Company), she immediately jumped into meetings with bankers, lawyers, investors and analysts – without leaving her basement home office.

Adjahi notes that she has visited investors in Toronto, New York, London, Paris, and Montreal, where she is based, in a single day. Using video, she says, “the number of people we can reach is multiplied by 10.”

The Investor Perspective

Institutional investors are also finding the virtual-meeting lifestyle a way to accomplish more.

“For a couple dates, I’m triple or quadruple booked in May, when there are three or four different meetings I need to attend. Not having to travel to cover those meetings is obviously very valuable,” says Anthony Schein, Director of Shareholder Advocacy at Shareholder Association for Research & Education (SHARE).

Catherine McCall, Executive Director at the Canadian Coalition for Good Governance (CCGG), agrees: “It’s been a necessity and people are grateful that they have that access.” That said, she’s convinced virtual meetings cannot – and should not – replace face-to-face encounters. “This is an interim measure to deal with the very difficult challenges we have right now, but it’s not ideal,” she says.

Love them or hate them, virtual meetings are everywhere, and not all IROs are maximizing the distinct advantages.

Claudia Gruppioni, General Manager of Chorus Call Canada Corp. in Vancouver, estimates that only 15%-20% of corporate clients use video for quarterly calls. She believes that decisions concerning video largely boil down to personality types, with extroverts gravitating towards video while others opt for audio only.

“Some presenters are still shy to be shown on video. For others, it’s an issue of how they’re organized at home,” she says. Gruppioni notes that some businesspeople are concerned that their children will interrupt or that their camera or microphone is not high enough quality.

Schein is frustrated with companies that host virtual annual meetings in audio-only mode because it detracts from the online experience: “I do think there’s value in seeing people’s faces, so I’m surprised more companies aren’t providing that.”

Using video seems especially important given that virtual meetings lack some of the immediacy and interest of in-person events. “When a comment is made, you might hear people react to it, and the mood and tone and tenor can change,” says Schein. “That is lost in a virtual meeting…. Speaking into the abyss via telephone or Zoom is quite a bit different.”

Arguably, the chasm between virtual and in-person meetings is widest when a topic under discussion is contentious.

John Perenack, Principal at StrategyCorp, a strategic communications firm based in Toronto, notes that companies addressing a controversy can use technology to dictate who speaks (and who cannot). And while for companies the tighter reins may seem appealing, he notes that for investors this type of carefully orchestrated meeting can prove quite frustrating.

What the Future Holds

“Even with all the benefits of digital tools, can I envision a world where everything is going to be digital? I don’t think so,” says Perenack. “Investors making a $150-$200 million investment are still going to want to meet management face to face. There’s no getting around that.” 

Perenack’s sentiment is widely shared. Some suggest that face-to-face encounters may be particularly important in Asia and other cultures where meeting personally is prized. In cultures that prioritize efficiency, digital may have an edge.

“There are benefits and advantages to both kinds of meetings and that’s why you’ll want a hybrid,” says McCall. 

Going forward, IROs may find themselves cultivating a new competence: weighing when it makes sense to opt for the greater efficiency and productivity of virtual meetings – and when meeting face to face is imperative.

"It’s going to be a learning curve to figure out the balance between the old way of doing things and this new way that has been thrust upon us,” concludes Heaps.

While face-to-face meetings will always matter, he is convinced that IROs who master digital will have a distinct edge. “The reality,” he says, “is that the companies that utilize video the most effectively are going to move faster and reach more investors and get more done. Ultimately, they’re going to be more competitive.”