FIVE MINUTES WITH RICHARD CARPENTER
Richard Carpenter, CEO of Bladonmore, talks to Communicate about the value of Capital Markets Days and how companies can deliver impactful hybrid events for an investor audience.
Why are Capital Markets Days important to companies and investors?
Capital Markets Days are increasingly important for a host of reasons. In European terms, there was some regulation introduced a few years back called MiFID II, which essentially reduced the brokers role in facilitating these events. As a result, companies were forced to create them independently for the first time, but they often don’t have the experience or understanding to do so.
Everyone is now competing for capital in a post-pandemic climate, which means there is pressure from the financial community to hear about what companies are doing in terms of Covid-19 strategy. Equally, they are having to do it in a hybrid fashion. So, there are lots of challenges that companies haven't had to deal with before.
We do have clients coming to us specifically for help with Capital Markets Days. Historically, they might hold one to talk about a new strategy division, once every two years or so, to give colour around specific aspects of the business. Now we are seeing more of them, with smaller days focusing on a particular part of the business.
In what ways has the pandemic and the move to virtual comms impacted Capital Markets Days?
Previously, everyone would just get together in a room and hear various stories for a few hours, and it would impact the share price accordingly. I think now with everyone sitting at Teams and Zoom all day, you are really trying to keep the attention of investors. You must consider that these investors probably receive 20 other invites for similar events at the same time. There will be competition, so you have to make them more interesting.
There is even less concern about leaving a meeting early in this virtual world, and investors can leave at the click of a button. Some companies are doing well, and other companies really haven't got to grips with the fact that the world has changed and their approach must change with it.
What is the key to ensuring Capital Markets Days are delivered with purpose and impact?
You need to have really clear messaging, which sounds obvious, but companies often forget and use their own acronyms and internal speak. A lot of the generalist investors won’t have specialist knowledge, so you have to make it really clear and easy for them to understand. Have three core messages you want to get across and keep coming back to them.
Companies need to bring the information to life and ensure messaging is consistent. If you have five speakers, make sure they have all talked to each other before the event. Again, it sounds basic, but a lot of companies forget this and will bring teams together a day before the event and then panic because there is a lack of consistency across the messaging or structure. Make sure the teams have practiced their delivery. It is important to give the speakers some time prior to the event, because no matter how brilliant a presenter you are, you need to rehearse.
It is important to have a solid running order and ensure things keep moving throughout. If you have one person presenting at a podium for forty minutes, you will lose your audience. What we say now, is to do a ten-minute piece but break it up with an animation or film. You can change the setting from single person presentation to a panel discussion or interview. Mix it up and use different ways to get your information across because that is what will hold the interest of your audience. The key is in variety.
How have you seen ESG incorporated into Capital Markets Days?
I think ESG has become more important to virtually all financial communications. While some sectors have been doing really well in terms of ESG for several years, there is now a pressure for it become part of everyone's story. Climate change is more visible now. I can remember talking to investors 15 years ago when they said, ‘We’re not worried about that, we are only interested in the bottom line.’ Whereas now they are realising that ESG actually has a significant impact on the bottom line.
There is also more pressure from pension fund trustees who are the beneficial owners of this money, who then instruct their investment managers to take it much more seriously. There is more pressure on directors to think about ESG in terms of their wider stakeholders’ groups rather than just shareholders. It is top of mind for everyone, and we are seeing a lot of companies wanting to put much more ESG information into their results and investor meetings.
How do you see Capital Markets Days evolving in the next few years?
I think they are getting much more important for some of the reasons I mentioned earlier. Brokers not having such an incentive to create these days themselves, the onus then falls on companies to manage that information directly. There is always a thirst for more information from the financial community towards firms and the companies that they invested in. But I think providing clarity around the investment opportunity and explaining aspects of your business, which might not be quite as simple to understand in this setting is important.
There is a recognition that companies can’t just arrive to these things, and they need to put more preparation time and effort in to, not just the messaging and the rehearsing, but also the structure of the day and how it's going to run. I think hybrid is here to stay but it requires a whole new skill set.
I suspect we're going to see slicker video production and a news type environment with graphics to bring a story alive. Better produced events will make the events stickier, and being digital you have those analytics to see if investors are staying or leaving. Ultimately these things are important because they can have massive impact on your share price, and for the relative amount of effort that the company should be putting in, it's quite brilliant.