Tashan Hendricks
Managing Director
The Jamaica Stock Exchange (JSE) has been recognized internationally as the No. 1 Performing Exchange in the World for 2015 and 2018 by Bloomberg. But as our stock market soars, and more companies get ready to list, they must consider their responsibilities to all stakeholders beyond dividends.
Stakeholders are typically investors, employees, customers, suppliers, communities, governments, or trade associations, who have a vested interest in a company. They generally seek to understand the business’ strategy, leadership, board composition, executive compensation, capital allocation, management performance among other factors that can determine whether this company fits their interests and expectations.
We see increasing attention from investors on traded companies’ Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) approach. Most modern markets look to the triple bottom line (TBL) theory to gauge success in this arena. The idea is that a company can be managed in a way that not only makes money but which also improves people’s lives and the well-being of the planet. We see where the U.N.’s plan to address the 17 Sustainable Development Goals (SDGs) by 2030 has become a key driving force for CSR and ESG work.
Investors and Corporations have seen increased regulation, demands for transparency and a quest for standards. They recognize that ESG Ratings are tools that help provide valuable investment information and assess progress towards becoming better corporate citizens. Recent data has shown that companies with successful Investor Relations (IR) underpinned by sustainable ESG strategies outperform others by up to 40%.
IR is a management responsibility, especially of publicly traded companies, that integrates finance, communication, marketing and compliance into an effective two-way communication between a company and its current and potential investors. Investors play a major role in the success and growth of a company. Therefore, it is important for companies to maintain strong, transparent relationships with them. IR acts as a portal, a passage through which investors, analysts, and anyone else with a request or a demand for information, and the company executives communicate. IR also acts as a translator, breaking down high level data and jargon into accessible stories that support their vision and value.
On Wall Street, investors and shareholders – as many people do – view the CEO or CFO as the face of the company, however, when you dissect the inner workings of the top publicly traded companies, an IR team is usually crafting that strategy. Although one may expect this public role to temper what CEOs do and say, there are many examples of highly visible CEOs who are eccentric, disagreeable or controversial. According to a study by the Harvard Business Review that investigated how the market reacts to CEOs’ personalities, there is still wisdom in managing impressions for CEOs. More conscientious (relative to less conscientious) CEOs’ firms experienced 2.59% lower stock risk, on average, and increasing risk resulted in a 3.83% increase in returns for their firms, whereas risk decreased returns by 1.70% in less conscientious CEOs’ firms.
In offering IR and supporting internal IR teams, our goal at COCREATE Caribbean Ltd is to enable our partners to achieve the optimum share price that reflects the fundamental value of the company; bridge the communication gap between the company and investors; provide financial information to investors in a timely and accurate way; build receptive capital markets for future financing at favourable terms; provide non-financial data to support company valuations; observe the rules of securities commissions and stock exchanges; and present investor feedback to company management and the board.
Working with COCREATE Caribbean, Boards and Executive Leadership teams will experience strategic support in transforming long-term shareholder value and building long-term credibility with the investment community. Through a transparent, meticulous, collaborative and client-led process, COCREATE fuses data, strategy and creativity into tailoring solutions for each company seeking to build and maintain strong stakeholder relationships.
For more information on how COCREATE Caribbean Ltd can support you and your company with Investor Relations, please email our Business Development Manager at requests@cocreatecaribbean.com
