by Kellie Friery and Angela Rodenhauser

December 19, 2023

This blog post is co-authored by Kellie Friery and Angela Rodenhauser.

With new regulations on the horizon, volatility in the market and ever-changing technology, to name just a few challenges, investor relations (IR) professionals need to be ready for anything. While we may not know exactly what is around the corner, being mindful of key issues as you plan for 2024 will help you successfully navigate what’s ahead.

So, as 2024 rapidly approaches, what should IR professionals be keeping top of mind?

It’s Not Going Away – Artificial Intelligence

AI has been all the rage on Wall Street this year and its impact is only going to grow as it becomes a norm in our everyday life.  Utilizing AI in your IR program offers many benefits to help strengthen your messaging and overall IR strategy (data analysis, reporting, consistent messaging, efficient communications), BUT there are legal, accuracy and compliance risks to be aware of as well.  AI won’t replace the human element of our profession, but if you haven’t started experimenting with AI, don’t get left behind. As we heard recently at a conference, “AI won’t replace you in IR, but someone who knows how to use it might.” We suggest checking out IR Magazine’s “IR playbook on AI: A roadmap for successful and responsible implementation” for useful information on adopting AI, potential uses, safety concerns, implementation and more.

It’s Finally (Almost!) Here – SEC’s Climate Disclosure Regulation

It is now likely that the final rule for the SEC’s pending climate change disclosure regulation will be released during the first quarter of 2024 to meet a regulatory deadline – or the SEC may have to start the rulemaking all over again. Legal and political challenges to the rule are inevitable, but climate disclosure requirements and compliance for U.S. public companies could begin in the 2025/2026 time frame. There are numerous implications for investor relations including integrating the disclosures into existing financial reporting such as annual reports and filings, as well as more proactively engaging with investors on climate-related strategy and risks. For more on ESG data management, read the latest from our colleague Gregg LaBar.

It’s Time for a Rebound – M&A Expected to Pick Up

After a sustained downturn, deal activity bottomed out in early 2023 amid pressures from rising interest rates, geopolitical tensions and recession fears. Many dealmakers are optimistic about a recovery in 2024; however, challenges remain including a higher cost of capital. This could lead to your management team increasing their focus on stock performance (as it relates to your cost of capital) and also more questions from investors about your M&A strategy, capital allocation priorities and overall access to capital.

It’s An Election Year – Prepare for Volatility

According to recent data published by Forbes Advisor, the year leading up to an election typically shows lower returns as investors cope with uncertainty. However, in the 12 months after a presidential election, the market’s performance tends to be stronger than usual, regardless of which party is in office. While we can’t be sure these trends will hold true in the upcoming presidential election cycle, we are certain there will be plenty of questions around how the candidates could impact economic policy and business relations both domestic and abroad. It will be important for your team to understand the potential impacts to your company and how you expect to navigate these changes.

It’s Just Getting Noisier – Simplify and Communicate Often

Analysts continue to be overloaded with coverage responsibilities and the news cycle isn’t slowing down. The need to communicate your company’s story in a way that cuts through the noise is more important than ever. Seek out opportunities to reinforce your key messages and be direct. Take advantage of all the communications platforms at your disposal  (including video, the IR website, social media channels, earned media, etc.) to provide a consistent and compelling story. While all of these channels are essential to your strategy, we continue to hear from companies and the investment community that meeting in person provides unique value and those interactions should continue to be a priority. And at the end of the day, regardless of the medium, articulating your value proposition, setting clear expectations for performance and reporting on your progress are really the building blocks of a successful financial communications strategy.

2024 is shaping up to be another interesting year for the IR profession. We look forward to monitoring these trends and sharing updates with you throughout the year.  Contact Angela Rodenhauser or Kellie Friery to learn more about our Investor Relations practice or sign up for our weekly IR newsletter.