June 15, 2022
In early June, the National Investor Relations Institute (NIRI) held its 2022 Annual Conference, which is a great opportunity to reconnect with old friends, meet new friends, learn about the latest issues impacting investor relations and public companies, and share best practices with industry peers.
This year’s conference was loaded with distinguished speakers and highly relevant topics, but one topic clearly stood out from the rest in sessions, conversations and debates among both attendees and presenters: the rapid emergence of policies and reporting related to Environmental, Social and Governance (ESG) initiatives.
Together with my colleagues Angela Almasy and Brittany Mihaila, who also attended the event, we have assembled a few key takeaways that stood out from this year’s conference:
- Neils Holch, NIRI VP of Public Policy and Advocacy, hosted a discussion summarizing the many new proposals coming out of the Securities and Exchange Commission in 2022, including one related to Climate Change Disclosures that would require companies to disclose significant information about their internal processes in evaluating and addressing climate risks, opportunities and impact. A majority of the folks we spoke with felt that the requirements would put significant strain on their organizations and are hoping to see the final rule significantly revised. More information on NIRI comment letters and these proposals can be found on the NIRI website.
- With respect to ESG, some of the more interesting sessions focused on the “G” as it relates to helping companies define their corporate purpose. In one session, Ronald O’Hanley, chair and CEO of State Street, discussed his perspective on why governance should be a company’s highest priority and how it serves as the foundation that enables a company’s success around its environmental and social priorities, as well as its overall financial performance. Another panel included Daryl Brewster, CEO of Chief Executives for Corporate Purpose, who discussed the results of a recent study that included specific recommendations to help IR professionals successfully plan for, and adapt to, the changing governance landscape. A key point was that companies need to focus on conceptualizing and establishing their corporate purpose first before they define their ESG goals and priorities, as corporate purpose should serve as the basis of all company actions.
- The prospect of a potential recession was also a common theme among attendees. In one particular session, an online real time poll showed that 60% of session attendees indicated they think a recession is coming in 2023. The ensuing discussion highlighted what a number of IROs are experiencing and expecting as a result. One speaker said they are getting questions from investors on what their business looked like in 2008 to gauge if there are any warning signs on the horizon, while another speaker noted he is anticipating investors to begin inquiring about the company’s cash flow versus growth strategy in the near term. Two tangible suggestions offered were that IROs should be clear about their business’s levers and drivers while keeping the long-term story consistent to maintain trust when short-term targets are missed, and IROs should prioritize relationships with their FP&A team to stay aligned with how they are thinking through pressure tests and related financial analysis of their companies in preparation of a possible downturn.
This was the first time since 2019 that NIRI was able to host its annual conference as an in-person event. Leaving the conference, it struck me how impactful it was to be back together with industry peers once again. With so many great sessions, connections and discussions at this year’s event, I am already looking forward to the next one.
Lisa Rose is the President of Dix & Eaton and also serves on the NIRI Board of Directors. She can be reached at email@example.com.