Capital Markets & Investor Relations Australia
Welcome to the final edition of the Global IR Insights for 2024, where FTI Consulting's Australian Strategic Communications team shares intel from our global network in capital markets communication and what it might mean for Australia.
Would you put an AI-generated version of your CEO in front of investors?
Convincing senior management to record remarks for quarterly updates can be challenging. But would you consider using an AI-generated version of your CEO instead?
Swedish payment firm Klarna recently tested this idea. The company posted a video of CEO and co-founder Sebastian Siemiatowski walking viewers through Klarna’s third-quarter results. Except it wasn’t actually Siemiatowski but an AI-generated version of him. “This is how AI transforms not just what we do, but how we do it”, the company reported alongside the video.
Reactions have been divided. Tech enthusiasts were impressed by the AI’s realism, while others argued that an AI-generated CEO discussing corporate results might lack the authenticity investors expect.
AI’s role in investor relations is expanding rapidly. A March survey by NIRI, recently highlighted in The Wall Street Journal, found that 44% of US investor relations professionals are integrating AI into their companies’ IR programs. Companies use generative AI to predict analysts’ questions, craft responses, and enhance investor targeting.
While AI’s potential is undeniable, IR teams are navigating how best to use it. Over time, it will likely become an expectation rather than an option, making it crucial to understand both its benefits and risks.
Recent research emphasises the importance of transparency in AI use. Last month, FTI Consulting, in collaboration with Trinity College Dublin, analysed how the 50 largest European companies disclose information about their AI use and governance. The findings reveal significant disparities. While 42 companies detail their AI use cases, far fewer provide comprehensive governance measures like AI audits or performance metrics.
The study offers valuable benchmarks for companies to assess and improve their AI communications and governance. As AI reshapes the corporate landscape, maintaining transparency and authenticity will be key—whether or not your CEO is AI-generated.
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The long-term effects of US elections on Shareholder Activism
Last month’s US elections could shape the corporate landscape for years. A less restrictive regulatory environment could fuel increased M&A activity and activist campaigns in 2025.
FTI Consulting’s latest December 2024 Activism Vulnerability Report highlights notable campaigns involving Pfizer, Southwest Airlines and Cheesecake Factory. Mid-cap companies have also seen a surge in activist interest, accounting for 25% of total campaigns in 3Q24, up from 10% a year ago. Activists’ campaigns are expected to intensify in sectors such as Utilities and Media & Publishing, where shareholder expectations for strategic pivots remain high.
Waiting for activists to emerge before engaging with your shareholders is a recipe for disaster. Your announcements, conference calls, and investor presentations should reinforce the pillars of your enterprise strategy.
Proactive engagement, understanding activists’ motivations, and constructive responses protect leadership and long-term goals. Now is the time to review your IR strategy, strengthen your governance practices, and prepare your team for any challenges ahead.
The IR Team at FTI Consulting wishes you a wonderful holiday season and all the best for 2025! Watch a video wrap-up from us below.
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The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.?FTI Consulting, Inc., including its subsidiaries and affiliates, is a consulting firm and is not a certified public accounting firm or a law firm. FTI Consulting is an independent global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. FTI Consulting professionals, located in all major business centres throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges and opportunities. For more information, visit www.fticonsulting.com.