IT SAYS a lot about the quality of the people in the Canadian investor relations profession when IR consultants are more concerned about the integrity of the country’s capital markets than its regulators and main stock exchanges.
That seems to be the case with the recent acquisition by TSX Group Inc. of full-service IR firm The Equicom Group.
The country’s leading business daily, the Globe and Mail Report on Business, reports today on the concerns being raised about the conflicts of interest that arise from the deal.
I’m quoted in the article, as are Canadian IR icons Dick Wertheim and Ken Barnes. Others, who preferred to remain nameless (no guessing why), also chime in.
Personally, I don’t care what the TSX does just as long as it doesn’t bring disrepute to, or lower perceptions of the Canadian IR market’s professionalism and integrity. My firm’s clients are predominantly located outside of Canada, which I know is partly because the country’s corporate reporting standards are highly regarded by many internationally.
So I worry that any perceptions of Canada as a cowboy market could hurt my firm’s continued ability to attract new international clients. The same goes for TSX-listed companies wanting to attract international investors. Will they trust a market that permits inherent conflicts of interest? Perception is reality, and we IR pros probably know that better than anyone.
Bottom line here is that while there are certainly some competitive concerns at play, the Canadian IR folks speaking out are all concerned about the message a deal like this sends about the standards of integrity the TSX subscribes to.
When an exchange has to talk about Chinese Walls and having “different buildings” you know its top managers see the problem, too.
It just doesn’t ring loud enough alarm bells for them. At least not louder than that other sound ringing in their ears — Ka-ching!