• Investor relations professionals confirm investor activism on the up 
• Over half state investors are increasingly short-termist

A survey of investor relations professionals, conducted by Deloitte, the business advisory firm, has shown that investors are becoming more active as a result of the credit crunch.

Commenting on the survey results, Deloitte Partner and Vice-Chairman, Margaret Ewing said: “As the credit crunch bites, investor relations professionals are feeling the knock-on effects of increased demands of fund managers to deliver quick returns.  UK listed companies are trying to steer their businesses through turbulent waters, while dealing with the increasing pressure of activist investors’ needs.  In fact, pressures have grown to the extent that many CEOs and CFOs now spend over a fifth of their time liaising with investors and their representatives.  The credit crunch has really turned up the heat on the boards of listed companies.  Whilst it is clearly very important for shareholders to take an engaged interest in their investments, managers have to be careful not to lose focus on driving the success of their enterprises in these difficult times.”

Key findings:

• Two thirds of investor relations professionals say that investor activism has increased as a result of the credit crunch;
• Over half say investors are increasingly short-termist;
• On average, 20% of a CEO/CFO’s time is spent on investor relations activity;
• Two thirds do not have a specific plan in place to deal with activist investors.

Leor Franks, Head of Practice Development for the Corporate Finance practice at Deloitte, added: “While listed companies are dealing with the increased demands of shareholders, they do not necessarily have a strategy in place to defend against or manage the potentially aggressive attentions of activist investors.  With an increasingly numerous and disparate group of investors with different motives, listed companies need to ensure that their communication strategy means they do not gain adverse attention from activists but also think carefully about how they defend themselves against any unwanted investor attention.  As both economic and shareholder pressure mounts, management should think carefully about preparing an activism defence plan; in the same way that bid defence is already second nature to most listed businesses.  With an effective plan in place, the board can rest assured that they can concentrate on the business at hand while keeping their investors happy.”

Ends

Notes for editors

About the survey
The second Deloitte Investor Activism survey analysed the responses of 57 UK based investor relations leaders. The survey was conducted on 1 May 2008 at the annual Investor Relations Society conference in London.

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.