Tell us about your role within Depositary Receipts?
I oversee the Global Investor Relations Advisory (GIRA) and Investor Solutions teams for BNY Mellon’s Depositary Receipt business.
How has COVID-19 changed the way that you're supporting clients?
Early on, we designed a series of COVID-19 related webinars that we’re doing every two weeks. We interview subject matter experts on timely topics such as communicating with investors, economic implications, and most recently how investors are responding to a virtual environment. We weren't sure how much client engagement we would have, but we’ve had more than 200 clients participate in this series of webinars so far.
We're also supporting clients by helping them engage with investors using virtual platforms. Traditionally, intermediaries like broker-dealers have been the primary source of connectivity between companies and investors globally, but increasingly, it's fallen upon companies to drive engagement more directly. We're helping our clients with ways to engage with investors using traditional conference calls and beyond, especially since this period may last for a long time. For example, we have virtual equity conferences in the pipeline where we can bring together a number of clients and institutional investors. As a result, this may actually lead to companies directly engaging with investors on a more regular basis.
How have your work setup and working arrangements changed?
In an on-site environment, it's easy to have quick topical discussions with colleagues. We're reaching out to each other even more to make up for the human aspect. Sometimes it’s just checking in to see how people are doing. Some colleagues are one of two working parents. They've got to find time to support their kids with schoolwork or, as in my case, daycare. We also have colleagues living alone or with elderly parents, both situations come with challenging dynamics in a period of necessary isolation.
What have clients been asking about?
I'd break it out into two areas: COVID-19 related and how the world will look afterward.
Clients are leaning on us to help develop virtual investor programs via webcasts, webinars, etc. They're also asking about how to position themselves with investors and run a more regular investor relations program through the second half of 2020 and even the first half of 2021. It's a challenge for them to prioritize current and potential investor engagement during a chaotic period that may last a while.
We've also been working with clients on additional activities now that they've gotten into this cadence. They may have extra capacity to address other areas of their investor relations strategy beyond the crisis. We’re seeing more questions from an environmental, social, and governance perspective, as well as traditional investor targeting, and more questions about future corporate governance strategy.
What are some of the biggest impacts on securities markets?
We take a very long-term approach to our relationships with clients. We're helping them cut through the noise of what's happening in markets now and solidify strategies for once we get past the immediate crisis.
In some jurisdictions, regulators are mandating or at least influencing dividend suspensions. For example, a quarter of STOXX Europe 600 companies have postponed or cancelled dividends in the last month. That may affect their shareholder base, especially if there's a large retail investor base that depends on receiving dividends. We've been doing an analysis on this impact.
In addition, some companies are moving to a virtual annual general meeting (AGM) format. Countries such as Australia and Japan have allowed companies to delay their AGM and then do them virtually. This can have repercussions for investors. If you've got a dissenting shareholder, management can handle their questions openly in a meeting room, but in a virtual environment, investors have concerns about the potential for censorship. We're helping companies that are considering this format understand how to do so effectively. This may even go forward beyond COVID-19.
What are some additional likely scenarios after this crisis has alleviated?
We’re hoping to see a pipeline of issuers wanting to come to market. The venture capitalist and private equity world needs to have an exit strategy for companies in their portfolios.
In some markets, we’re also seeing things starting to come back already. If you think back to the Great Recession in 2008, the volume of companies raising capital actually increased. Companies were at lower valuations, but the volume did grow sharply in terms of companies raising capital.
Overall, I'd say that one main impact of this situation has been additional stress. There's the pressure that your covering analyst may be under, the equity sales teams that you work with, your institutional investors, whether they're passive or active — everyone is trying to figure out what to do next. The playbook hasn't been written. Investors may want more communication on the impact of COVID-19, but what do you disclose? How do you approach guidance in a period where the line of sight is not easily found?
It may come across as a cliché, but we're all in this together. Generally, everyone is trying to ensure they are maintaining or even improving the relationships they have. This is an opportunity to build upon what you've already got. Understanding this could go far in helping to ensure that you're maximizing your existing relationships, if you take into consideration the pressure people are under and that we’re living through a very unique period.
About Guy Gresham
Guy oversees the Global Investor Relations Advisory (GIRA) and Investor Solutions teams for BNY Mellon’s Depositary Receipt business. The GIRA team’s mandate is to work closely with DR issuer clients to develop measures designed to generate liquidity and visibility among the sell side, institutional and retail investors. Investor Solutions works with the buy side to educate and expand utilization of the DR product.
Before joining BNY Mellon in 2006, Guy was a New York-based IR consultant specializing in cross-border financial communications, before this he was with the Australian Securities and Investments Commission (ASIC) in Sydney, Australia. Guy sits on BNY Mellon’s Corporate ESG Working Group and is a member of the advisory committee for the Yale Initiative on Sustainable Finance (YISF). He holds an Honours degree in International Economics from Victoria University, New Zealand, and an MBA from Cornell University, USA.