The Importance and Value for Voting on Corporates and IR Teams in the Executive Team Survey

The Importance and Value for Voting on Corporates and IR Teams in the Executive Team Survey

By Ursula Kizy, Director (Americas) 

Many are well aware of the significant place Institutional Investor’s Research Team rankings has among investors and sell-side analysts in the financial community. The II Rankings have become a vehicle by which investors are able to share their appreciation for ground-breaking sell-side research, and research analysts can gauge the effectiveness of their work…the reciprocity between voter and nominee has created not only an exercise in relationship building, but a full throttle dash to be the best research house in the industry.

My role, and that of a few of colleagues at Institutional Investor, is focused not, however, on our Research Team rankings. Amani Korayeim (EMEA), Carvin Lee (Asia), Michael Clemens (Japan) and I (Ursula Kizy, Americas) work to produce II’s Executive Team rankings, whereby investors and sell-side analysts share their views regarding the best executives and investor relations teams, globally. The Executive Team rankings are a respected industry benchmark for publicly traded companies, and have been the gold standard by which corporate executives and their IR teams measure their performance for over two decades.

We’re aware of the importance of these rankings for IR teams and executives, and have more recently been speaking with the buy side to discuss important themes in investment decision-making and how that ultimately ties into the evaluation of corporates within the Executive Team rankings.

Change, movement and credibility were recurring themes disclosed by investors and came up repeatedly in conversations. The upcoming decade promises major paradigm shifts both in business and socially.  Which companies are changing or adapting to new business models to maximize profits and revolutionize their industry? These changes, or lack thereof, can weigh heavily on investment decision making.  Regarding movement, CEO or CFO departures could de-stabilize a company that doesn’t have an appropriate succession plan in order. Furthermore, will a CEO who moves from one company be able to successfully apply a previous business strategy to their new corporate home? Due to the pandemic, CEO turnover hit its lowest levels in two years, but is poised to make a resurgence in the second part of 2021, so investors will be closely following these moves. Credibility was a hard-hitting topic. A CEO’s or CFO’s credibility is determined by consistency between communication and messaging with follow through in business strategy, capital allocation, and balance sheet. Stickiness of long-term stakeholders can be compromised when the C-suite’s communication doesn’t match his or her actions. IROs weren’t excluded from the requirement of credibility either. In fact, the words “credible,” “honest” and “trustworthy” were noted in verbatim investor commentary within the survey process of the All-America Executive Team more often for Investor Relations Officers than for executive management.

Institutional Investor’s Executive Team rankings aim to uncover these trends in company success by tracking long-term year-over-year winners that have demonstrated the ability to innovate and therefore remain relevant and successful, or the rising stars – those companies that seemingly rise through the ranks from near obscurity. The most successful CEOs who move from one company to another, tend to take their 1st place positions with them, as do strong CFOs and IROs.

By voting in the rankings, investors are able to put their admiration and appreciation on display, but are also taking part in ensuring that business strategies remain nimble and sustainable, and hold executives and IR teams to high standards of consistency and trustworthiness.