60 Second Interview: Gary Davies, CEO IR Society

March 8, 2019

What pulled you in to the IR profession when you first made the move?

Back in 1999, the (then) Head of Investor Relations for the old GlaxoWellcome organisation, Jennie Younger, asked the Director of Medical, Regulatory, and Product Strategy to recommend someone in his organisation that could join her IR team to cover a maternity leave that could support the team with medical and commercial knowledge from within R&D. Pharma is a very technical sector and so this particular level of expertise was considered to be a very advantageous background to support IR. Having just returned from a 5 year international assignment in the United States, during which I had completed an Executive MBA that had enabled me to make a career progression from a role in Medical Strategy to become a Commercial Strategy Director, I was approached about the role. My initial reaction was, “What is Investor Relations?”, followed swiftly by “What have I done wrong??

I suspended my disbelief and went along to meet with Jennie, who explained the function and the role to me in a way that truly inspired me. She took the risk of offering the role to me and, after a brief consideration around moving from a permanent position that I had been working towards for some time to take on a maternity leave cover with no certainty of what I’d come back to at the end of the period, I decided to take the risk and accept the opportunity. It turned out to be one of the best decisions of my career and I owe Jennie a huge debt of gratitude for introducing me to IR and convincing me to join the team! From my experience it is good to have a mix of backgrounds within IR teams, with some IROS from financial backgrounds and some with experience of some parts of the business, be it technical or marketing. Whatever their background, good IROs will be proficient in a number of areas, most especially in communications skills – in writing and presentation, and be both a good listener and a good storyteller.  

During the time that you were in IR at GSK, how did the role change and what was the highlight?

During my initial 12 month period covering a maternity leave in the IR team at GlaxoWellcome, the mega-merger with SmithKlineBeecham took place that was to create GlaxoSmithKline. I could never have planned for such an extraordinary opportunity to take place during my (at that stage) limited time with the team. To be involved at the centre of the creation of the new company was incredible – working with the two top management teams, networking across functions from both of the heritage companies as they merged into one, and then working closely with the new CEO and management team to communicate the birth of the new organisation to the market was one of the most intense and satisfying highlights of my career.

What changes do you think we will see in the industry over the next 5-10 years?

The start of the implementation of MiFID II in January last year has laid the foundation of many of the changes that will continue to be felt for the next several years, and it will probably be a few years before they fully settle down. The topic has been covered in great detail elsewhere, but the reduction in research coverage and ‘juniorisation’ of some of the sell-side roles (with many experienced sell-side analysts leaving the industry or moving to in-house corporate roles in IR, Finance or Strategic Development) provide an opportunity and a challenge for IR professionals. The resulting increase in ‘incoming’ from the buy-side directly to IR teams provides a greater opportunity to focus on improving the ‘relations’ part of investor relations, particularly where IR teams are large enough to capitalise. There is, of course, the challenge of resourcing this new world, be it adding internal resource or funding external support from advisors and third party suppliers of written research, especially for the small caps. The trend for an increase in passive investing, and the growing investor interest in ESG factors and their integration into mainstream decision-making will also require a refocussing of IR activities.