RIYADH: For Maria Al-Zahrani, living and working in Saudi Arabia is not only a career opportunity, but also a “mission.”
The daughter of a Saudi father and an American mother, she felt the pull of the Kingdom from an early age, and after her father’s death when she was a young girl, she always felt that her future lay in the country.
“From my 8-year-old viewpoint, there was a lot of unfinished business, so it was my mission to come back to Saudi Arabia,” she said.
The route took her from her native Washington state to New York — where she was a victim of the crash of Lehman Brothers in 2008 — and on to London, Libya, Dubai and, ultimately, Riyadh, where she is now head of investor relations (IR) for Almarai, the leading foods group in the Kingdom.
“My father was very patriotic and it was important to him I come back to the country and get to know my culture and my community, so that’s what I did,” she said in the capital during the recent Financial Sector Conference.
Al-Zahrani lays claim to the title of the only female head of IR in the country, and sits on the board of the Middle East Investor Relations Society, the professional body for executives in the fast growing subsector of the financial services industry.
She is one of a small but growing number of women in what is largely a man’s world, but the momentum is with her and other women as the Kingdom seeks to transform itself, and the financial sector opens up to gender equality.
“I knew it was only a matter of time before women could be actively integrated into the workforce. Now what you see with women is the moment that everyone’s been waiting for. It’s a tremendously exciting time to be a woman working in the country,” she said.
Al-Zahrani is a pioneer in two senses — as a woman in the male-dominated world of finance, and as a practitioner of IR, which is relatively new to the Kingdom’s corporate world.
In a nutshell, IR is where marketing, communications and shareholder value meet. The profession aims to help maximize a company’s share value by communicating with investors about the forces driving the financial performance — and delivering capital and dividend growth to shareholders.
As more Saudi companies join the Tadawul, and the Kingdom opens up to foreign investment, the job becomes especially important. Investors — actual and potential — are on a learning curve not only about Almarai, but also about the economic, social and cultural environment in which it exists.
Al-Zahrani said the financial establishment’s view of IR is changing. “Sometimes they look at IR professionals as maybe part of government relations, as people who engage with the regulators and fill out paperwork. The IR function was seen as virtually a kind of public relations officer job, and there is a role for that. I have people on my team who deal with that kind of work,” she said.
But as the role as evolved in the more sophisticated investment scene in Europe and North America, it has become more than just regulator liaison.
“There are Internal reporting and monitoring functions — looking at how our shares are trading on a daily basis, and notifying executives of any events taking place in the markets.
“Then there is the regulatory compliance aspect, which is more the PRO-type function, engaging with Tadawul and the regulator Capital Markets Authority, with whatever they need to fulfil their requirements.
“Lastly, there are the investor engagement aspects, where I am actively involved. A lot of that has to do with engaging international institutional investors. What’s interesting about that part of the job is that a lot of our conversation is not just around facts and figures — a lot of what we discuss is more intangible,” she said.
Al-Zahrani often finds herself dealing with issues that go way beyond the corporate details of Almarai, or even the wider food industry in which it operates. “Investors have questions like: What it’s like to be a woman in Saudi Arabia, what do I think about women driving, what do I think of the geopolitical environment, is their capital going to be at risk because of wars in neighboring countries?” she said.
“Fundamentally, they want to understand, is this a company I can respect? Can I put my money here and feel comfortable?”
Since Al-Zahrani joined Almarai in 2017, there have been occasions when investors were in need of urgent answers to these questions. Last year, a difficult economic backdrop, the introduction of value added tax, and rising costs associated with the government policy of Saudization added up to increased pressure on profits for the multibillion-riyal company. How does she explain these issues to investors without being seen to blame government policy?
“I don’t necessarily make a criticism. These are exogenous factors to the company. They are not a reflection of our business, but they certainly have impacted our business,” she said.
Rather than handing out blame, Al-Zahrani got down to the practical job of explaining Almarai’s long-term strategy for dealing with the profit downturn — a focus on bigger “industrial” customers at home, and expansion into different areas in the Middle East, such as Egypt and (“selectively”) Iraq, for future growth.
What about trickier areas, such as Qatar, previously a big trading partner but hit when the Kingdom and its allies imposed sanctions against business there?
“I just explain to shareholders that we are no longer active in that market. It was 5 percent of the top line from a revenue perspective, so we’re looking at other ways to grow the business from a top line perspective,” she said. These include leveraging up from straight consumer business at home — selling more to industrial caterers and restaurant chains — to the international growth strategy.
Most of all, how did she explain to international investors the circumstances surrounding the murder of journalist Jamal Khashoggi last year, an event that led to fears that foreign investment would stay away from the Kingdom in protest? Was her phone ringing hot?
“Not so much, but we do get questions about that, and my general response is that it is really out of the scope of my work — I’m focused on private sector activities, on business and that is more of a political dialogue that does not have much to do with my day to day job, or the company for that matter,” she said.
Those kinds of critical moments aside, the IR role seems destined to assume greater prominence in Saudi Arabia. For one thing, the upgrade to MSCI emerging market status has already led to greater foreign participation in the Kingdom’s domestic markets. Almarai was included in a recent list of “top picks” for foreign investors in Saudi Arabia by US investment bank Goldman Sachs, she pointed out.
Many studies have proved the strong connection between good cooperate governance — of which IR is an integral part — with financial and share price performance, and this is a theme Al-Zahrani will continue to push, along with the benefits of transparency and social responsibility.
One thing she feels is desperately overdue is to have a formal IR function made mandatory for all Tadawul companies in the Kingdom. “It’s tremendously important. Listed companies need somebody in their organizations who is going to clearly articulate the business model and message to external parties.
I think historically there has been a bit of a hesitancy to be transparent and open, and they need that,” she said.
“It’s a very traditional view and a very Saudi view. They have to fight the tendency to be reserved. If you’re not there telling the world what the message is, they’re going to make up their own story,” she added.
It is a lesson for the financial world, but also for the rest of the Kingdom, Al-Zahrani believes. “It’s not just a perception management problem for the company, it’s for the whole country. People make these really horrendous allegations about the country and nobody stands up and says, ‘no, this is not correct.’ They let the lies continue and the stories get twisted. I don’t understand why they don’t directly face it,” she said.