Mark Hynes - thoughts on corporate disclosure

Opinions on changing rules, changing best practices, and their effect on investor relations officers.

Thursday, February 19, 2009

The IRO – from communicator to accountant and now to compliance?

Has the IR profession taken another turn? I only ask because, in managing another Compliance course for the IR Society yesterday, it is evident that the interest in compliance issues is now high up on the agenda for many companies.

25 years ago, when IR was young, a lot of the early practitioners were communications people. Perhaps coming from PR or corporate communications departments.

Fast forward a few years, and a financial background was essential. Qualified accountants and ex analysts came in to help support the financial story, with others coming from Treasury. Many are still there. I suspect a survey of the professional background of IR people would show a majority with this sort of training.

However the landslide of new and changed rules in IR, triggered by European Commission and their aim of a single European market for capital raising, is changing this. Since 2005, we have seen complete rewrites of the FSA Handbook, the Companies Act, the market abuse rules, rules on takeovers.....As a result, best practice among companies is changing fast.

Evidenced by the rising number of sanctions from regulators, the recession is also creating a stepping up of supervision of compliance.

So how are companies reacting to this? Where does the balance lie between IR and the company secretariat, legal and external advisors? If there is tension between managing the company’s communications and ensuring that company is seen to comply, how will that balance be achieved?

In the US, various mandatory filings, such as the MD&A, have become dominated by safe harbour statements, rather than being used as a potential communications opportunity; is the European market headed into a similarly compliance dominated world?

IR professionals have always had to be aware of the compliance obligations. However in this brave new environment, it may be that we will see more compliance-trained people coming to the job.


Post a Comment

<< Home