A Practical Perspective on Risk Oversight for Modern Boards
The National Institute of Investor Relations (NIRI) held its annual conference in Chicago last week to discuss critical issues facing public companies, public markets, and the future of investor engagement. With keynote addresses from current SEC Chairman Paul Atkins and Ariel Investments’ co-CEO Mellody Hobson, and unique sessions with top tier law firms, proxy solicitors, and bulge-bracket IROs, the Alpha Team has six key takeaways on what today’s IRO needs to consider in 2026 and beyond.
Take #1 - The SEC Wants to “Make It Cool Again for Companies to be Public”
SEC Chairman Paul Atkins said in no uncertain terms that the bureaucracy, overreaching costs, and regulatory complexities are keeping great companies out of the public markets. At Alpha, we couldn’t agree more. No one is suggesting a wild west approach, but the burdens of Reg SK financial reporting combined with the weaponization of corporate governance are problematic, particularly for smaller issuers. We’re finding that Finance and IR Teams are battening down the hatches ahead of the earnings print earlier and earlier. This isn’t because of a Reg FD issue or calendar problem – but because meeting all the disclosure requirements for quarterly filings takes too many resources (time and staff). We appreciated the self-awareness of the Chairman around the rise of SPACs, and that they have proven to be an effective and efficient workaround to the cumbersome IPO process. He also acknowledged the value of shelf registrations, which can also lead to faster listings. Necessity is the mother of invention, and bankers need to get deals done.
When pressed by the moderator in a rapid fire round of questions, Chairman Atkins gave brief but illuminating responses on the Commission’s priorities. On proxy advisory firms, such as Glass Lewis and ISS, Chairman Atkins believes there is a compliance issue at large here; notably, that you should know what you’re voting on, and not just if they support it or not. Further, these advisory firms are not the arbiter of good decisions. Chairman Atkins also highlighted the importance of retail investors in Exxon’s recent proxy proposal, as well as others. However, with regard to 13F reporting deadlines, while Atkins tacitly agreed 45 days feels too long and is a holdover from the 1970s, shortening the reporting timeline is not a priority right now, and with respect to filing changes, 13Gs and 13Ds are far more important. While Alpha strongly supports reducing the 13F timeline for all filers, it won’t be happening any time soon.
Take #2 – We Need a System That Works for All Investors – Including Retail
Today’s retail investor is not the stereotypical day trader looking for quick wins from the internet bubble. Of the 162 million Americans who are invested in the stock market, 2 million of those people account for 50% of all retail ownership, and 16 million of those same individuals account for 90% of all retail ownership. These investors are sophisticated, tend to be long-term oriented, and can be smart about your company.
From the retail-focused sessions Alpha joined, experts agreed that companies of all sizes need some degree of retail investor engagement. Admittedly, that can come in many forms and not every concept will work for every company. For example, we receive daily requests from podcasters hoping to interview executives, but not every c-suite is ready for the microphone. Meanwhile, we’ve helped several clients host their own podcasts to discuss industry trends, product launches, and essentially own the narrative around a particular topic with a monthly episode available on all digital streaming platforms.
Retail ownership percentages have always been a bit tricky to calculate outside of a proxy distribution. Alpha met with a few vendors who claim to be able to do this with reasonable accuracy. Once you generally know what you’re working with, it is imperative that IR liaise with the corporate communications and media team to discuss what materials exist and what else can be done to drive retail engagement. Their support can be critical during a contentious proxy situation, so it is essential to lay the groundwork well before you need their help.
In terms of proactive ideas to think about, consider whether a traditional earnings call is the best way to reach retail holders, or if a shareholder newsletter from the CEO would be better. Simplify your investment thesis and make it clear at the top of your IR website. Use more video and visuals to explain your story and products and use social media strategically to distribute that content. Further, strongly consider a smart, strategic PR program and how it can complement your IR program when executed with an integrated approach. Alpha’s holistic approach to building a corporate reputation is essential to reaching this previously forgotten constituency.
Take #3 – Assume Any Investor Could be an Activist
In a panel discussion moderated by friend of Alpha Greg Taxin of Spotlight Advisors, Greg and his fellow panelists emphasized what we at Alpha have long held as a belief: any investor can become an activist, and the signs are there at the first conversation with management. That first meeting will come after months of analysis and be assured that that investor believes they know exactly what’s wrong with your company. The greater concern for both you and the investor is whether that problem is fixable. With the impact geopolitics is having on the global economy, Alpha IR’s Shareholder Preparedness and Vulnerability Analysis is critical. Now is the time to ask yourself, your management team, and your board: What’s our total shareholder return? Are your top 10 holders human beings or quantitative shops? If either of these questions yield less than the ideal response, what is IR’s first line of defense?
First, every investor meeting should include a discussion about strategic rationale. Why are you doing what you’re doing right now? Second, pay attention to the nuances and look for clues. What questions did they ask? Make sure those questions are addressed in your investor presentation. And third, don’t let investors ask all the questions. For a non-holder, ask why they wanted to meet with you. Having done thousands calls with Wall Street for perception studies at Alpha, investors are willing to share far more than you anticipate if you give them the chance to do so.
In the Tuesday morning keynote, Mellody Hobson, co-CEO of Ariel Investments, echoed similar sentiments. You should be friendly with your investors, but they are not your friends. Further, Mellody and Taxin’s panels independently agreed that companies too often feel that if they ignore an investor they don’t like, the investor will just go away. If anything, it emboldens investors to take an even closer look. As we’ve advised clients for decades: the first moves with any investor matter most.
Take #4 – Guidance is a Form of Transparency
With a potential switch to semi-annual reporting dominating the conversation as of late, the need for greater transparency is mounting. Across several sessions featuring buyside participants, all emphasized the necessity of annual guidance as a vote of confidence from management on the strategy and the availability of opportunities for the company. Should the SEC approve a voluntary switch to semi-annual reporting, annual guidance will be even more critical to helping less visible corporates, such as small caps and turnaround stories, avoid getting lost in the fold.
Take #5 – Step Aside ESG, AI is the New Shiny Object
It can be easy to forget that the SEC has a financial materiality mandate. They are not environmental regulators and have no intention of becoming one. While ESG remains an important selling point for European investors, most U.S.-based funds believe it is more of a reporting burden and a distraction. Alpha wrote several annual ESG reports on behalf of clients in the early 2020s, but most of those have moved to a 2-3 year cadence. ESG is a ‘nice-to-have’, but no longer a ‘need-to-have’ for certain stories.
Artificial Intelligence (AI) for investor relations, on the other hand, is a constantly evolving concept. Several sessions were devoted to the topic, with several vendors including AI-based capabilities within their platforms. One panelist noted that once your proxy is published, you may have several AI-written letters on activist letterhead highlighting the areas of your filing they take issue with. Individual IROs said they are increasingly relying on internal systems to review written materials for consistency, market triggering words, and tonality. Meanwhile, common CRM tools for IR professionals are also looking to automate with real-time data analytics and predictivity technology. At Alpha, we’re closely watching this space, and believe the market’s reliance on AI will drive IR professionals to turn toward it for more than simple efficiency improvements.
Take #6 – Tokenization is Coming, Are IROs Ready?
At its most basic level, tokenization of shares will vastly expand access to the public markets by facilitating access for investors who hold a cryptocurrency wallet but lack a traditional brokerage account. More bluntly – the creation of tokenized shares will transform the stock market; enabling faster movement between buyers and sellers from today’s settlement of one full business day to near instantaneous. The SEC already approved the expansion of trading hours on the NASDAQ into two sessions – 4:00am to 8:00pm Eastern, and 9:00pm to 4:00am Eastern, five days per week, which will likely go into effect on December 6, 2026.
What do 23-hour trading days mean for IR teams? At Alpha, we believe larger organizations may need to invest in global IR teams to help navigate time zones and breaking news. We also like the idea of greater participation in IPOs via tokens, with one speaker noting that potentially 5% of shares could be allocated to tokens. There have been few milestones since the creation of the SEC in 1934 that will have as much of an impact on how stocks are bought, sold, and traded in the U.S. capital markets as tokenization.
Conclusion: How Will IROs Respond?
Change can be difficult, but the investor relations profession is rapidly approaching a critical juncture with the next level of innovation in public markets. If the SEC’s goal is to bring back public companies, the way we’ve always done it won’t work. With tokenization coming fast, more sophisticated retail investor participation, the use cases for AI expanding, and shareholders taking an activist slant from the first meeting, IROs cannot sit idly by. In the infancies of change, now is the time to experiment, investigate and adapt to ensure your IR function remains front-footed. At Alpha IR, we believe our role is to be a counselor and voice of perspective. With already stretched IR teams, often carrying the load of different departments like treasury or corporate communications, the need for support has never been greater.
