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August 30, 2010 by Rob
The good folks at Report Watch by e.com have just issued their 2010 Best Annual Reports piece. Interesting view of the world of annual reports from this London-based “organisation” - definitely worth clicking through when you have a moment.
This was my first year serving as a judge for this report and I can honestly say I was completely blown away by the quality of annuals I saw - from content to creativity. These were true investor education pieces… these companies were using their annual report to assert their distinct value proposition… these reports were strong and proactive pitches to the investment community… these reports were built to make an impact, not meet a compliance… these reports also contain rich CSR content that global investors seek… take a look at the report and see for yourself.
I will tell you this - after reviewing the books I reviewed - I find it hard to believe the talk of the printed annual report going the way of the Betamax is anything more than just that - talk. Be interested to hear your thoughts on this report and annuals in general.
August 23, 2010 by Rob
Recently, I helped facilitate a day-long IR training session for a client organization. It was a really interesting session as the participants included folks from communications, finance and legal so we had the chance to look at the issues from a number of different vantage points.
During lunch, one of our senior advisors who is a former Institutional Investor All-American research analyst spoke to the group to provide yet another view of the world, as well as field any and all questions on the “mind of the investor.” During this discussion, one of the participants asked, “What are some things that companies do that absolutely infuriates investors and analysts?”
I thought this was a great question… here’s the list the former analyst came up with:
1. Don’t be dismissive of a question. It doesn’t make you look smart, it makes you look like a defensive jerk. It will also cause the Street to believe that it has uncovered something meaningful.
2. Don’t give out information you don’t want to give out. Investors and analysts are not your friends - and while they may not quote you direct, they will share whatever information you give them.
3. Stay consistent in your disclosures. If you provided a particular data point this quarter, investors are going expect an update on that data point next quarter. Inconsistency in disclosure will cause investors to believe (needlessly in most cases) that you are hiding something - or worse.
4. Help the Street understand the company’s strategic mindset. This isn’t an ask for material, non-public information or proprietary data, rather it is a request for a better understanding on how the company is measuring progress and identify opportunities. The Street wants a better sense of the environment in which you operate - broadly speaking, where are the pressure points, where are the windows of opportunity, etc.
Easy as pie, right? I actually thought it was a pretty fair and doable list. Based on your experience, what would you add or delete from this list?
August 16, 2010 by Rob
It’s gone on long enough that I can no longer ignore the elephant in the room. I’ve tried to look the other way. I’ve tried to quietly make suggestions. Nothing’s worked. Therefore, I’m left with no other course of action but to debunk an American myth and take my life in my hands: a healthy percentage of companies are not hosting effective earnings conference calls with investors.
The reason? They are not properly prepared.
Scarier still is the percentage of companies that fall into this category that don’t realize it. So… how can you figure out if you are one of those companies? Here are a few questions to ask yourself:
1. Are you reading the release to the participants?
2. Do your opening comments take longer than the time allotted for Q&A?
3. Do you anticipate questions and address them in your opening comments?
4. Do you know how to maintain control of the call should a participant try to impose his/her agenda upon it?
5. Do you have a contingency plan should one of your CEO or CFO not be available to participate in the call at the last minute?
6. Do you rehearse the call in advance as a group?
7. If yes to #6, does the rehearsal also include the IRO playing the role of the investor/analyst in a mock Q&A session?
8. How do you close your call?
I won’t ask you how you answered these questions. I would; however, love to know how you evaluate the effectiveness of your conference calls.
August 09, 2010 by Rob
I know it seems like I’ve got proxy season on the brain lately but I thought this piece from Morrow & Co. was really well done and worth passing along.
After reading it, here’s my question to you: is blindly following the recommendation of a proxy advisory services firm a cop out on the institutional investor’s part? I think I do.
Don’t get me wrong - I understand the role that ISS and Glass Lewis (among others) play in today’s corporate governance… and it’s an important role. We need them on that wall.
I just find it hard to believe that an institution that has invested enough time and resources required to take a position in a company’s equity does not allow itself to take a position in that same company’s proxy. What am I missing?
July 26, 2010 by Rob
As you know, I do talk to myself about what’s around the corner at the intersection of Investor Relations and the Capital Markets. Lately, I’ve found myself asking a lot of questions… questions like:
1. Will there be an uptick in companies going private as some find the damage done over the past 20 months is just too much to repair?
2a. Just how much “deal inventory” is built up among private equity firms?
2b. If it is as much as I am hearing from folks, are we heading into the season of bolt-on acquisitions?
3. At the end of the day, what will the Dodd-Frank Bill mean for investors and IROs?
4. Why are folks seemingly folks more concerned with what dissemination channels are used than the IR messaging going into them?
5. If a particular strategy does not work for your shareholders, does it really matter if it’s a “best practice”?
6. Will recent events with BP and Toyota change the way Boards handle risk management?
7. Is the IPO market really coming back?
8. What does a double rainbow mean?
Have you been asking yourself any of these questions? If so, how do you find yourself answering them. If not, what have you been asking yourself?
July 19, 2010 by Rob
If you’re like me, you likely expected the 2010 proxy season to be much more combative than it is shaping up to be. For the most part, it was eerily quiet despite what seemed to be ideal conditions for activists to assert/insert themselves - from lingering depressed valuations to hoarded cash on the balance sheet, among other things.
My colleagues and I recently spent some time sorting through what’s already occurred this current proxy season with an eye towards preparing for 2011. Our thoughts on the subject can be found here.
Be curious to know how this lines up with your experience in 2010 or expectations for 2011.
July 12, 2010 by Rob
Last Friday, Hill & Knowlton’s Anil Dilawri asked a fair question, “Is there such a thing as too much investor marketing?” - which got many all a’twitter (pun intended) about how many meetings is too many meetings.
While I am tempted to ramble a bit how investor marketing is much more than non-deal road shows, I’ll stick to the topic at hand. Personally, I think one meeting is one too many if a clear and distinctive value proposition isn’t presented. Seriously, you’re wasting everyone’s time if you make no compelling argument as to why now is the right time to own your company’s equity. In other words, it’s the quality of the message, not the number of meetings held. So, when measuring your investor marketing efforts, don’t ask “what’s too much?”, ask yourself :
- Is the message being understood?
- Are analysts and investors not surprised?
- Are analysts and investors enthusiastic?
- Is IR effective in a crisis? In capital raising?
- Are management/board well informed?
- Does the IRO have credibility? Who do management and investors turn to first?
- Is the IRO an effective corporate governance sentinel?
Would love to hear what you ask yourself (or what is being asked of you)?
July 06, 2010 by Rob
The other day I tweeted that Canada was today’s source for investor relations innovation. At the time, I had put as much thought into it as it took to type the thought in less than 140 characters. It wasn’t that I was being flippant - rather it was simply a cell of a germ of an idea of a theory that I just needed to capture so I could see what it looked like.
On the heels of both Dominion Day (sorry, I can’t support calling it “Canada Day”) and Independence Day in the U.S., I have come to a conclusion: I agree with myself. Canada will lead the next IR revolution.
In no particular order, here are six reasons why:
- Radian6. For social media to ever really get traction within the corporate ranks as an IR tool, CFOs will demand accountability through measurement. Radian6’s tool is one of the best - if not the best - I’ve ever seen for measurement.
- Investor Candy. Despite its name, this outfit has a very smart and thoughtful approach to IR on the Web. I find their mindset of “investor campaigns” very intriguing and, frankly, refreshing.
- Dominic Jones. At his best, he’s the gadfly no industry wants but is ultimately better for having. At his worse, he’s prowling the IR blogosphere looking for another virtual bar fight. Either way, he keeps you on your toes.
- Anil Dilawri. Anyone who thinks like this understands the potential of IR and how to think “around the corner.”
- Q4 Web Systems. Darrell Heaps on his gang of innovators keep finding new ways to build state-of-the-art IR websites that allow companies to reach investors where and how they like to communicate.
- Rhonda Bennetto. One of the few IROs who walks the talk when it comes to next-generation investor relations.
I’m sure there are even more reasons than this (and my apologies for any/all oversights). Regardless of the length of the list, it begs the question: why? Is it the butter tarts? Is it because they grew up listening to The Tragically Hip? Is it because Canadians, who are known for being uber polite, truly adhere to the concept that no idea is a bad idea? Is there some magical power within Manitoulin Island that I don’t know about?
June 28, 2010 by Rob
I live in fear of being “that guy.”
You know who I’m talking about - “that guy” who HAS to play on his iPhone while at the playground with his kids instead of playing with his kids while at the playground; “that guy” who HAS to bring his own Starbuck’s coffee to any and every meeting; “that guy” who HAS to wear blue dress shirts with white collars because that’s what’s being worn on Mad Men (in fact, I bet it wouldn’t be hard to find pictures of that guy from a few years ago wearing a green tie with a green shirt a la Regis); “that guy” who HAS to “go hard or go home” in the summer softball league even though he couldn’t make the varsity baseball team in High School… you know “that guy,” right?
Well, I’m not going to be “that guy” who has got his head so far up his own… errr… blog… that he can’t simply acknowledge when someone else makes a lot of sense.
So… let me say this loud and clear: Anil Dilawri, I salute you. Your recent blog post regarding IR sites being treated like a member of the team is so right it’s wrong. I could not agree more and I’m not just saying that because I’m H&K alum. If I’ve said it once, I’ve said it 100 times: companies need to view their IR website as a 24-hour call center for investors rather than an online repository for old news releases. Love the way you framed the concept.
There - that wasn’t so hard. Honestly, I am amazed at the number of bloggers who can’t even acknowledge people who leave comments on a particular post, let alone blog positively about another blogger. Talk about “that guy”!!??!
June 21, 2010 by Rob
I have a confession to make - I talk to myself. Not always… but regularly. It mostly happens when I go for my morning or weekend walk. Most of the time, the conversation doesn’t last very long and rarely does it consume an entire walk. This morning’s conversation was quite different - it actually started while I was still in the house and didn’t end until I forced myself to change the subject!
It went a little something like this…
Me: “Hey, have you notice all the talk about web disclosure?”
Myself: “Yeah, I have. I honestly don’t understand what the fuss is all about. You’d think someone had come up with something controversial or something!”
I: “Well, that’s because you’re simple minded.”
Me: “Now, now. No reason for name calling. This isn’t a certain hash-tag ‘discussion’ on Twitter.”
Myself: “You’re right. Sorry about that.”
I: “What’s funny is that I thought that all disclosures were done on the Web these days.”
Me: “They are. It’s a bad name for it. They should call it ‘single-source disclosures’ or ‘self-published disclosures’ to make it clear that it’s about disseminating corporate news directly from the corporate website rather than running the news through a third-party wire service.”
Myself: “Sure sounds like a good idea.”
I: “Yeah, that’s a no-brainer. We keep saying that IR needs to embrace technology more - here’s a risk-free way to do so. Plus, we’ve put a lot of resources into the IR website. It would be nice to get more out of it. I say we do it!”
Me: “Huh?!!? You think being solely responsible for the dissemination of all your corporate news is risk free!!?”
Myself: “Or needing another reason to call IT is risk free?!!”
I: “He’s got a point. It’s been two weeks since your PDA worked right.”
Me: “That’s what she said.”
Myself: “Hey - don’t blame me! I didn’t touch the thing before it got all screwed up!”
I: “That’s what she…”
Me: “Enough… Focus! Does it really make sense to be your own author, editor and publisher? Sounds like a recipe for errors, if you ask me.”
Myself: “Hmmm…that is a really good point. The wire services always catch errors. Doesn’t matter how many folks at corporate proof the release. There always seems to be something.”
Me: “Didn’t I just read that a wire service issued a release on a company that wasn’t actually from the company?”
Myself: “Yeah - but the release didn’t have any typos!”
Me/Myself/I: LOL
Me: “To be fair, there isn’t a security protocol in place that cannot be broken. Remember the couple that crashed the Presidential party? If the Secret Service can’t stop everything, no one can.”
Myself: “I suppose that’s right. I guess it would have been worse if the service had issued the wrong version of a release for the company.”
I: “How’d we get on this topic?”
Me: “I have no idea.”
Myself: “We were talking about the checks and balances of a third-party service provider.”
I: “Riiigghhhttt.”
Me: “We could also build our own checks and balances into a self-publishing system… we could have someone from legal or finance involved.”
Myself: “I like that idea though those folks are just as busy as we are on the day of the announcement.”
I: “True. The entire corporate team is so jammed up with the script and Q&A the morning of the announcement. Shoot, some companies send their releases to an IR firm deal with the wire service!”
Me: “But it’s a good idea, right?”
Myself: “Yeah, it is. Makes a lot of sense.”
I: “So are we saying that companies should do it?”
Me: “We are… sorta… it depends on the size of the internal team, the strength of the IR site, the…”
Myself: “You know, you raise a good point. There are still way too many IR websites that just aren’t up to code. It would be like trying to send a text from a typewriter.”
I: “That’s hysterical. You need to remember to tell Mrs. B that one.”
Me: “Hang on… don’t interrupt me… we’re talking about making better use of the site… we’re talking about driving more traffic to the site… what if the site isn’t ready for more use or more traffic?”
Myself: “It’s a fair question though I don’t know if the point’s completely on target or not.”
I: “Yeah, I think we’re getting into the weeds on this.”
Me: “I told you. For a simply idea, it’s got a lot of wrinkles to it. No wonder there’s so much chatter about it.”
Myself: “For me, it’s another example of why the phrase ‘best practices’ should be abolished from IR - what’s right for one company doesn’t mean it’s right for all companies.”
I: “Hmmmm… the death of best practices… that’s an interesting idea…”
Now - I am not asking you to confess whether or not you talk to yourself. But I would be interested in hearing where you come out on Web disclosure (or what I’d like to call “self-published disclosure”) at this point in time. Anyone… anyone?
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