The increasing complexity within corporate governance requires boards to stay updated on the latest regulations and trends.
This necessity is especially critical when considering an initial public offering (IPO) and capital raising. In a recent session, Maria Groschopp Dellwik, who leads Nasdaq's listing services in Sweden, provided valuable insights into the opportunities and requirements that a listing entails for boards.
This article distills key points from her presentation at the DEB executive chair summit, offering essential guidance for companies aiming to go public. Read more about our learnings here.
Meet the Expert
Maria Groschopp Dellwik heads Nasdaq's listing services in Sweden, assisting companies in listing on Nasdaq and supporting those already listed. With over 20 years of experience in financial services and capital markets, Maria brings extensive expertise in guiding companies through the complexities of IPOs. Her background includes roles in business development and management consulting, focusing on Nordic capital markets and Nasdaq's listing offerings. Additionally, Maria has entrepreneurial experience as a co-founder and interim COO of a startup network and as the founder and CEO of Sweden's first peer-to-peer lending service.
When it comes to trading, clearing, listing, exchange technology, information, and public company services, Nasdaq Global stands as a leading provider across six continents. With an expansive reach and a commitment to fostering growth, Nasdaq plays a pivotal role in the evolving IPO landscape and provides the most active market in Europe and the US.
Current IPO Climate
As the financial world watches closely, the IPO market is beginning to show promising signs of resurgence.
The IPO market is showing encouraging signs of revival. Despite recent hurdles, there is renewed optimism about the prospects for public offerings. Companies are increasingly looking to tap into public markets to fuel their growth.
The Swedish capital market’s robust ecosystem supports companies with capital needs, highlighting the crucial role private individuals play in these transactions. Nasdaq, advisers, banks and investors in the ecosystem work closely and actively to ensure that companies have the resources and guidance they need to succeed.
Nasdaq's Market Presence
Nasdaq's influence is felt globally, providing unparalleled market reach and opportunities for companies.
Nasdaq’s operations span six continents, powering over 130 global exchanges and owning 31 markets. This extensive network underscores Nasdaq's influence and capability in the financial world.
In the Nordic region, Nasdaq covers Sweden, Finland, Denmark, and Iceland, and all the Baltic countries; Latvia, Estonia, and Lithuania. These markets offer a unique financial ecosystem that enables both Nordic and international entrepreneurs to access vital capital, fostering innovation and growth.
Benefits of Listing on Nasdaq
Choosing to list on Nasdaq comes with numerous advantages that can significantly benefit a company’s growth and visibility.
Access to Capital: Listing on Nasdaq provides companies with access to a broad investor base, significantly enhancing liquidity and capital availability. This access is crucial for companies looking to expand and innovate.
Global Exposure: A Nasdaq listing increases visibility and credibility on a global stage. This exposure can attract top talent, boost brand awareness, and open doors to new opportunities.
Supportive Ecosystem: Nasdaq's ecosystem is rich with banks, advisors, investors, and regulators, creating a supportive environment for listed companies. This network helps ensure that companies have the guidance and resources needed for success.
Trends and Regulations in Capital Raising
The landscape of capital raising is continually evolving, with new trends and regulations shaping the future of investments.
There is a growing emphasis on sustainability and ESG (Environmental, Social, and Governance) factors in corporate governance codes worldwide. The shift from voluntary to mandatory reporting highlights the increasing importance of sustainability in capital markets.
Recent regulations, such as Sweden's Act on the Review of Foreign Direct Investments (FDI Act), reflect a global trend towards greater scrutiny of foreign investments, particularly in critical sectors. These regulations aim to protect national interests while fostering healthy investment environments.
Listing Requirements
Understanding the listing requirements is essential for companies aiming to go public on Nasdaq’s various markets.
Nasdaq First North Growth Market: Designed for growth companies, this market offers a streamlined listing process and access to capital. Requirements include having a sufficient operating history, adequate financial resources, and meeting free float and shareholder distribution criteria.
Nasdaq Main Market: Companies aiming for the main market must adhere to higher standards, including IFRS reporting, corporate governance codes and well-established internal controls. These stringent requirements ensure the credibility and stability of listed companies.
Preparing for an IPO
Preparing for an IPO involves meticulous planning and a clear understanding of the process ahead.
The IPO process typically spans several months and involves multiple stages, such as internal preparations, choosing advisors, due diligence, prospectus drafting, transaction preparation and road show (if capital is raised) and approvals. Each stage requires careful planning and execution.
Board members play a crucial role in the IPO process. They must ensure compliance with listing requirements, support management, and engage with stakeholders to facilitate a smooth transition to public trading.
3 Practical Tips for Boards
To navigate the complexities of an IPO successfully, board members should follow several best practices.
Education and Training: Board members should undergo training to understand their obligations and the regulatory landscape. Nasdaq offers seminars and educational resources to help boards navigate these complexities.
Strategic Planning: Boards must develop a clear strategy for the IPO, including defining transaction structures, engaging in pre-marketing activities, and preparing for investor relations. A well-thought-out strategy can make a significant difference in the success of the IPO.
Compliance and Governance: Ensuring the right composition of the board considering competencies required and independence to the company and owner. Ensuring robust internal controls, financial reporting, and adherence to governance standards is essential for a successful listing. Boards must prioritize these aspects to build investor confidence and secure long-term success.
Using the well-established ecosystem, Nasdaq’s support and ESG for IPO Success
Maria Groschopp Dellwik's insights underscore the importance of leveraging the supporting ecosystem in the Swedish market and Nasdaq’s support already at an early stage on the IPO journey, embracing ESG considerations, and maintaining high compliance standards.
Navigating the IPO landscape requires careful planning, strategic execution, and a deep understanding of regulatory requirements. By staying informed and proactive, boards can effectively guide their companies through the IPO process and unlock significant growth opportunities.
Thank you Maria for sharing your expertise and developing Swedish board work together with us.
