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More Than Half of Fortune 500 Investor Relations Officers Say Market is ‘Overheated,’ According to Korn Ferry Survey

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Editor’s Note: Survey Results at Bottom of Release

- Global and US Political Instability Biggest Concern of Investor Relations Officers -
- Business Insight and Managing Complexity Named as Top Skills Needed -

LOS ANGELES, Feb 8, 2018 — As recent fluctuations in the market create investor uneasiness, Fortune 500 Investor Relations Officers (IROs) say the market is overheated and a correction was overdue. That according to a late January “pulse poll” of Fortune 500 IROs by Korn Ferry (NYSE: KFY), in which 55 percent of respondents voiced their concerns over market volatility.

The survey also showed the role of the IRO is becoming more complex and central to organizational success.

While respondents cited expectations around growth as the biggest challenge they face in their IRO role, the issue that is of largest concern for them is global and U.S. political uncertainty.

“Today’s volatile markets, new tax legislation, a new chairman of the Federal Reserve, and an unpredictable operating environment underscore the critical role the Investor Relations Officer plays in advising leadership to navigate these very choppy waters,” said Richard Marshall, Korn Ferry global managing director - Corporate Affairs and Investor Relations Practice.

Asked for advice they share with their CFOs and CEOs in navigating today’s landscape, IROs cited executing the business plan and delivering consistent results, under-promising and over-delivering, keeping analysts and investors informed, being transparent and having messaging that is clear and simple as key requirements.

The survey found that the top skill needed for IROs, beyond the functional mastery of their role, was business insight – the knowledge of their business and the marketplace to advance the organization’s goals. The No. 2 skill named was managing complexity - making sense of complex, high-quantity, and sometimes contradictory information to effectively solve problems.

Respondents also listed driving results as a skill needed to be successful in the IRO function.

“More than ever, the IRO is required to have a broader set of business and leadership skills beyond the core IR skills to ensure success in today’s dynamic market,” said Marshall.

In terms of their own careers, 38 percent of the surveyed IROs said the biggest challenge was a lack of opportunity to progress beyond IR. The issues of analysts moving into IR roles, and a lack of opportunity due to fewer public companies and consolidation both came in at 28 percent, while 6 percent said gender and ethnic diversity was the biggest challenge.

When considering their next career move, the largest percentage (37 percent) said they would pursue a CFO role, followed closely by a move to another finance or functional role outside of IR (36 percent). Becoming an IRO at a different company or industry came in last at 27 percent.

“We’re seeing the IRO elevating in importance in the eyes of the C-suite, given the increasingly critical role it serves in helping interpret the competitive, fractious, and activist prone marketplace that exists,” said Marshall.

About the Survey – The Korn Ferry survey of IROs was conducted from Jan. 24 - Feb.1 via an on-line survey among Fortune 500 Investor Relations Officers.

Survey Responses:

Are the markets “overheated?” Do you think we’re headed for a correction?

Yes - 55 percent
No - 18 percent
Not sure - 27 percent

What are the biggest challenges you face in your role today as IRO (rank, 1 being the most important)

No. 1: - Expectations around growth
No. 2: - Communications (24/7 news cycle and social media)
No. 3 - Shareholder activism
No. 4 - Regulation reform
No. 5 - Socially responsible investing

Which issues concern you the most in this new year? (rank, 1 being the most important)

No. 1 - Global and US political instability
No. 2 - Fed’s policies and changes in leadership
No. 3/No. 4 - Shareholder activism and tax repatriation (tie)
No. 5 Managing through MiFID II implications

What are the biggest challenges facing the Investor Relations Profession?

Lack of opportunity to progress beyond IR - 38 percent
Analysts moving into IRO roles - 28 percent
Fewer opportunities due to consolidation and fewer publicly traded companies - 28 percent
Gender and Ethnic Diversity of IROs - 6 percent

What skills – beyond the functional mastery of the IRO - are most important today to be a successful IRO? (rank, 1 being the most important)

No. 1 - Business Insight - Knowledge of business and the marketplace to advance the organization’s goals.
No. 2 - Manages Complexity - Making sense of complex, high quantity, and sometimes contradictory information to effectively solve problems.
No. 3 / No. 4 (tie) - Decision Quality - Making good and timely decisions that keep the organization moving forward; Instills Trust - Gaining confidence and trust of others through hones ty, integrity, & authenticity
No. 5 - Drives Results - Consistently achieving results, even under tough circumstances.

For your next career move, what is your desired position?

Become a CFO - 37 percent
Move to another Finance or Functional Role outside of IR - 36 percent
Remain as an IRO with different company or industry - 27 percent

About Korn Ferry

Korn Ferry is a global organizational consulting firm. We help companies design their organization – the structure, the roles and responsibilities, as well as how they compensate, develop and motivate their people. As importantly, we help organizations select and hire the talent they need to execute their strategy. Our approximately 7,000 colleagues serve clients in more than 50 countries.

 

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