Investor Relations Talent in MENA
There is a shortage of experienced IR professionals in the MENA region which up until recently has not been a concern. However, as the importance and recognition of the IR function is growing more globally, this is having an effect and starting to put pressure on boards to adequately resource this function. Additionally, there is the pressure from increased legislation in certain markets that require every listed company to have an IR representative in-house.
Saudi Arabia’s Capital Markets Authority (CMA) has issued a strongly worded statement that urges all listed companies in the Kingdom to establish professional IR. It sees this pressure on companies as a central part of its regulatory role, to promote confidence in the Saudi capital markets and to protect citizens and investors from unfair and unsound practices. The authority also says it will ‘periodically assess the need to obligate listed companies to establish an IR function’.
Given there is a shortage of experienced IR professionals in the region, often it is the case that companies who are serious about it, will look to hire from the West. Someone who knows what good IR looks like, can bring across “best practice” and understands the nuances of managing external and internal stakeholders. This is not without its problems though – not least because of cultural and language barriers. The reality until now has been that for those companies who are starting to think about developing an IR function, they will usually take someone internally from finance, strategy, corporate development and move them to IR – and train them “on the job”. The problem with this is they are inexperienced and have not been exposed to best practice. This approach will ensure the regulatory requirements are met – i.e. reporting is delivered, but it runs the risk of becoming a very reactive function, rather than the opportunity of a true value add, proactive function with regular engagement and dialogue with the markets through salesforce presentations, capital markets days, conferences etc.
For those coming into IR from other functions, it is important for them to immerse themselves with peers, both in the region and internationally, to gauge the full potential scope of the role.
To read the full article, download the 2019 MEIRA Practitioners Report