When WSP Global holds its annual meeting this May, the Montreal-based consulting giant may very well straddle the virtual meetings of the past two years and in-person events by holding its first-ever hybrid AGM.
Quentin Weber, WSP’s Senior Advisor, Investor Relations, is envisioning a meeting held in a physical space where investors who prefer to meet in person can roam the halls and have face-to-face conversations. Others can attend virtually, and they too will have an opportunity to interact with the CEO, the management team and the Board.
Preparing for a hybrid AGM in which shareholders will cast votes takes work, acknowledges Weber. Even so, he is leaning toward a hybrid approach, recognizing that investors exhibit individual preferences when it comes to how they’d like to interact with WSP. As of the fall of 2022, for instance, Weber estimates that 60% of his IR meetings were virtual, with another 20% hybrid and 20% in person.
Manager of Corporate Reporting and Investor Relations Ivan Zarate anticipates that Air Canada’s spring AGM will also accommodate both in-person and virtual participants. “I think all the big meetings will end up being hybrid,” he predicts. “We want to attract a big crowd and make it open for everybody.”
IROs are testing the waters when it comes to planning IR events, according to Jamie Bardell, Vice President, Issuer Events, at Q4 Inc. Right now, what’s easiest to agree on may be what doesn’t work. Bardell has heard tales of investor conferences in which CEOs and CFOs board a plane to attend, only to find the buy-and-sell sides are participating from home. Instead of speaking to a live audience, members of the C-suite are ushered to a conference room to conduct a Zoom meeting that could have happened literally anywhere.
“People want to know that if they’re attending a meeting physically, others are doing the same,” says Bardell. “If not, it devalues the reasons for going to a conference in the first place.”
The Latest Trends
Whether virtual, in person or hybrid, IR meetings are being held in dramatically higher numbers compared to just a few years ago.
“In the shift from pre-pandemic to pandemic to the current environment, we’re conducting a lot more meetings,” says WSP’s Weber. He maintains that because scheduling a virtual call is so easy, analysts and portfolio managers are game to engage. “We can quickly make a meeting happen,” he says. “The pandemic also allowed us to meet more overseas or international or U.S. shareholders.”
Of course, the nature of the meetings is different, too. Virtually, he says, “you get on the call and you jump straight into Q&A. The human interactions are a bit affected, and it’s more difficult to crack a joke.”
Going virtual doesn’t mean that face-to-face meetings have been phased out – they just tend to happen at a later stage in the relationship.
Yan Lapointe, Director of Investor Relations and Treasury at TC Transcontinental, agrees that virtual meetings make it easier to fill the IR calendar, and yet he’s found that planning events takes forethought. When scheduling a roadshow, for instance, he now avoids Fridays and Mondays because fewer people are physically in the office on those days.
Improved technologies are also reshaping the landscape.
Prior to COVID, says Q4’s Bardell, few companies prerecorded their formal remarks. Today, 36% of Q4’s clients are prerecording their formal remarks for conference calls, up from five-to-ten percent just two years ago. Bardell applauds this trend, noting that companies that prerecord can fret less about whether their webcam is working, and can speak without worrying that the legal team will have to step in later because a number was misstated.
Another technological game-changer is what Bardell calls the “bring on stage” feature. During a virtual presentation, an audience member can ask to interact directly with a member of management. “This lets you be part of the conversation,” he says, noting that even though the two people conversing are not present together, the cameras are turned on and so the audience watches the back and forth as part of a natural-seeming exchange.
Succeeding at Virtual
The advantages of virtual meetings are well documented and range from cost savings to efficiency (less air travel) and even safety (no one wants to be responsible for hosting a superspreader event).
Fiona Grant Leydier, a long-time IRO who was vice president of investor relations at Great Panther Mining until September 30, when the company filed for creditor protection, notes that some of these practical advantages are most keenly felt by small or micro caps.
“There are huge savings to running roadshows through virtual meetings, and maybe not travelling as frequently as some of us had been,” says Grant Leydier, who notes that earlier she sometimes spent 70% of her time on the road. “Virtual and hybrid make our dollars go further, especially now, when travel has gotten so much more expensive.”
That said, virtual conversations do have drawbacks. Establishing rapport is often more difficult via computer, says Air Canada’s Zarate. He continues: “You are sometimes just speaking to people who are looking at their screens, moving their heads and typing.”
Savvy IROs are figuring out how to hone their messages so they play better virtually. In a 2021 IR Magazine webinar, Neil Russell, a Senior Vice President at Sysco who heads the company’s IR effort, explained how painstaking preparation helped make his company’s first-ever virtual investor day a success.
Knowing that attention sometimes flags when watching a virtual event, Russell compressed what was typically a half-day presentation into just under three hours. The company prerecorded messages from management, reducing what would have been 30-minute presentations to 15 minutes apiece, adding interest by filming at different locales.
Grant Leydier agrees with the importance of rethinking the basics: “In a virtual conference, be sure to schedule breaks between meetings because no one is getting up and moving from one office or room to another.” She continues: “Without breaks, you can get very fatigued from just sitting in front of a computer.”
Hybrid: The Ultimate Juggling Act
An even bigger challenge than hosting a virtual-only event is navigating a truly hybrid world.
Lapointe notes that “the dynamic can be very weird” when some investors are there physically, and others are dialling in remotely. “People do not know where to look and are confused. It creates different groups because the eye contact is not the same,” he says. Lapointe also has found that some virtual attendees hesitate to ask questions, making for even more awkwardness.
When hosting hybrid events, says Q4’s Bardell, IROs should provide more instruction on how the proceedings will unfold, including a roadmap to remarks and even insights into how an event will be moderated. In addition, he notes that IR events that once might have been planned in three-to-four weeks are now taking six-to-eight weeks of planning because of the variables in play.
On the other hand, Bardell maintains that one of the silver linings from COVID is that “it’s allowed us to be more accepting of imperfection when it comes to communication.” After businesspeople began communicating over Zoom and Microsoft Teams, they quickly found that pets and children would occasionally interrupt the proceedings – and these interruptions were graciously indulged.
Finally, Bardell suggests that while exotic virtual backgrounds and other creative technologies hold appeal, IROs should guard against gimmicks and distractions.
“At the end of the day,” maintains Bardell, “it comes down to making sure your message is on point and you’re really focused on getting the information out as clearly as possible. Technologies will change, but that’s never going to change.”
What Will the Future Bring?
Thanks to the ease of virtual communications, IROs are seeing a rise in direct engagement.
WSP’s Weber notes that he has begun initiating more cold calls to shareholders when he spots an opening. “Analysts, shareholders and investors are more at ease doing that type of cold calling and getting a virtual meeting to happen than they were pre-pandemic,” he says. “There’s more comfort in doing these reach outs and in introductory calls. And that’s a positive trend, in my opinion.”
In the end, virtual and hybrid meetings may have refashioned the IR world out of pandemic necessity, but the advantages of communicating in these new ways seem destined to last.
“Each investor has very different circumstances. Some have kids at home, and some live hundreds of miles from the office and they don’t want to commute every day. Remember,” concludes Lapointe, “in investor relations, we want to talk to investors. So you need to know very early on what are the preferences of your investors. And then you’ve really got to respect those preferences.”