The Fifth (Analyst) Call

There's a bit of a debate brewing over the pros/cons of hosting a "fifth analyst call" to discuss upcoming proxy proposals with investors. Have you heard about it? The underlying premise is that a fifth call (the other four being quarterly earnings calls) would help companies create a direct line of communications and their investors during the proxy season, by-pass or minimize the influence of proxy advisory firms and improve the clarity of the proxy disclosures, among other things. Wachtell Lipton's David Katz wrote a particularly interesting piece on the subject, and others are starting to weigh in... mostly in favor of the concept. 

At first, I was wildly in favor of the idea, assuming you could properly address the various legal issues and considerations. And, while I still like the idea, I can't help to see the growing groundswell of support for the fifth call as a (not-so) subtle condemnation on the effectiveness of today's IR programs the more I let the concept marinade in my mind.

Seriously... look at the goals of the fifth call (e.g., create a direct line, minimize outside influence, etc.) and tell me how they differ than the goals of an ongoing IR program? That's right - they don't.

So, when I start to connect the dots, here's the picture I begin to see:

- Something must be wrong with a healthy number of IR programs if the fifth call seem like such a vital necessity. (I suspect the problem is that too many treat IR strictly as a compliance function.)

- In too many instances, IR has deferred all-things proxy season to the Corporate Secretary for too long. (Another example of an ill-conceived IR program.)

- Likewise, too many companies still see the proxy season as a 45-day(ish) project rather than an ongoing campaign. (If the annual meeting is the first time you've discussed such critical issues with your shareholders, it's likely too late.)

So... with this picture in mind, I have to ask: How can a single, 60-to-90 minute call possibly eradicate the damage done over the trailing 12 months by a poorly constructed IR program?

Don't get me wrong - I do like the idea (a lot) but it has to be part of a programmatic approach to IR. There are no "easy" buttons when it comes to sound corporate governance and investor relations. If anything, I'm rooting for the fifth call concept... particularly if it can serve as a wake-up call to companies on how to focus their IR efforts. 

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