Specialty report23.9.2020

The German capital market magazine "GoingPublic" published its special "Capital Market Switzerland" in September 2020 and positioned MDD with its knowledge of digital reporting. Read the complete interview here.

“A newcomer to the stock market can set the course much more easily”

Interview with Armin Galliker, CEO, MDD

The historic year of 2020 will be remembered for quite some time – it also brought with it a heightened awareness of a great variety of digital issues. GoingPublic Magazine spoke with Armin Galliker about the current trends – not only concerning Switzerland itself, of course.

GoingPublic: Mr Galliker, what advice do you give companies planning an IPO in Switzerland based on your 20 years of expertise?

Galliker: The advantage of a newcomer to the stock market today is certainly that they can adjust processes to meet current needs and implement them immediately. This also applies to reporting – it might be easier for a newcomer to move towards integrated reporting with all its ESG facets.

Is it necessary to distinguish between already listed companies and stock exchange aspirants?

I would argue that companies that have been in the public eye for a long time sometimes find it difficult to make rapid and significant changes in their communication with their stakeholders. A certain routine has certainly become established here, which is characterized by certain expectations on both sides. This can concern the form of reporting, but also – like in Switzerland – the issue of multilingualism. A newcomer to the stock market can set the course much more easily, e.g. for not reporting in several languages.

Based on your experience, how openminded are stock market aspirants when it comes to consulting? Do you tend to encounter a lot of resistance in this regard?

My experience is that newcomers to the stock market are quite open-minded about learning how their peer group has approached the relevant topics. This is very much observed.

Do you make a distinction between PR and IR topics?

The bottom line is that the underlying needs are the same: to communicate with your stakeholders in a manageable and efficient process. This may be called IR or PR; it may also be a task for the issuer‘s finance or legal department. Through integrated reporting, the needs merge further, or the reporting addresses questions from all stakeholders comprehensively.

Is the lack of history, the famous track record, whose reputation a newcomer to the stock market has to build up first, a big issue with regard to going public?

Of course, the most important thing is a constant and honest message. This is particularly reflected in the reporting. With good reporting, a track record and reputation can be built up over the years – or lost in a short period of time. Integrated reporting enables a newcomer to the stock market to generate additional trust.

As a service provider, do you have a kind of multi-year plan in mind or do you “drive by sight“, especially this year?

Of course, a lot depends on the content of the current year. But for the issuer‘s overall image, a multi-year plan that all stakeholders recognize through consistency and transparency is undoubtedly recommended. This makes the company credible in the eyes of its stakeholders. This applies not only to content, but also to forms of communication such as print, online, etc. This cannot and should not be changed or completely reinvented every year. Consistency creates transparency, i.e. each stakeholder can find the information they need quickly and efficiently.

... at least provided that the contact persons remain the same. How difficult is the initial situation when contact persons or responsibilities at the issuer’s company change?

This is an important point – quite clearly. But fresh blood often brings new perspectives and leads to the status quo being questioned in a positive manner. Changing responsibilities or contact persons on the part of issuers tends to have a major impact on smaller companies; at larger companies, a staff change reveals fewer discernible differences.

"We have reinvented ourselves several times in these two decades!"

Don’t new contact persons also bring ideas into play which, for example, have not yet been part of the multi-year plan mentioned above – and which may be difficult to integrate?

Our know-how naturally involves us keeping an eye on this – can an agreement be reached or do we need a new lowest common denominator? Conversely, it can also be said that the focus on new digital strategies is reinforced when new ideas have to be integrated. This year in particular has provided the appropriate occasions for this.

XBRL does not stop at Switzerland. Is the EU area, including Switzerland, homogeneously covered by the new requirements?

There is no doubt that digitization in Switzerland still has some catching up to do in these areas. Not everything is homogeneous with EU or international requirements; often only if subsidiaries are listed in the EU. My concern is therefore that Swiss entrepreneurs will lose the attention of international investors if reporting formats are not sufficiently congruent.

Who do you see as being responsible for the next steps to come?

The convergence of Swiss and EU regulations is a lengthy process. What every issuer can do in its own interest is to adapt to the needs and expectations of its international investors and to meet the standards that its target group has come to expect.

MDD is already celebrating its 20th anniversary, as mentioned at the beginning. After so many years in the business, is it possible to reinvent the wheel in terms of reporting for clients?

I would claim that we have reinvented ourselves several times in these two decades! We don‘t throw the tried and tested overboard, but we always have to keep up with new trends. That‘s what we have done; otherwise we probably wouldn‘t even have been able to celebrate our tenth anniversary. The exchange with our customers was very important. New thinking and development processes that are much more agile than their past counterparts also contribute to this. Take a look at the current, historic year of 2020 and see what all of this has changed. The bottom line is that it has brought more time for everyone, less travel and, ultimately, the requisite attention to all digital issues – no talk could have persuaded issuers with such a lasting effect.

Mr. Galliker, thank you very much indeed for your time and your extremely interesting insights!

The interview was conducted by Falko Bozicevic.

About the author

Armin Galliker is managing director and owner of MDD. Armin developed the concept and the technical platform for the creation of digital reporting.

E-Mail: a.galliker@mdd.ch