For the third year in a row, Canada’s best in investor relations gathered in Toronto to celebrate their achievements. The 2000 Investor Relations magazine Canada Awards was a swank and well attended event, with some 460 IR practitioners and their guests coming out to sip Nasdaquiris at the Royal York Hotel and discuss the burgeoning Canadian IR scene.
The Royal York has been a meeting center for Canada’s elite for over a century, and was therefore the perfect setting to pay tribute to this year’s winners. In the wake of the Grammy awards and on the eve of the Canadian government’s federal budget release, the event was charged with a kind of high velocity buzz. In fact, with live goldfish as the centerpiece at each table and all the top players in attendance, the evening would best be described as the perfect blending of celebrity chic and financial genius.
As in recent years, the effectiveness of new media was a hot topic amongst IR practitioners. Canadians are definitely catching on to the advantages of high-tech services like webcasting. Indeed, a webcast of the awards is archived at www.IR-live.com.
The brain drain was also on people’s minds. It seems Canada risks losing some of its best in IR as the country’s IROs make their mark, especially in the high-tech sector. Now that the practice of IR is alive and well in Canada, and with a shortage of experienced professionals south of the border, Canadian companies may lose out because they simply cannot match the big bucks offered by their US competitors.
Back to basics
There was also a sense that it’s time to get back to the basics of IR by focusing on timeliness, honesty, knowledge and accessibility – a message that comes through loud and clear in the research conducted for the awards by Angus Reid Group. The research looked to new developments in IR with three new awards for 2000: best IR by a CEO, best use of technology and a lifetime achievement award.
As IROs take on more strategic responsibility, they need the participation of senior management more than ever. This is something Jean Monty, CEO of BCE, understands well and was recognized for, being awarded best IR by a CEO. As one analyst explains, ‘He gives a clear vision of what the company is doing.’
The new CEO award demonstrates that IR in Canada has come of age, as does the first ever lifetime achievement award. Joanne Brown, president and CEO of Ciri, was chosen for the latter. Her acceptance speech was one of the highlights of the evening, recalling the importance of community and team work.
Brown has been spearheading the growth of Ciri over the last decade. ‘When we started in 1994, we had 175 members,’ says Brown, ‘and today we have 680.’ Ciri membership has more than doubled in the last three years, and Brown expects the growth will continue ‘between 5 and 10 percent in 2000.’
Brown is pleased with the way the practice is evolving. ‘IR is being recognized as a strategic corporate function,’ says Brown. ‘It has moved from reactive to proactive.’
Celebrity status
Technology, especially the web, has of course become an essential tool for IROs. The financial community is now expecting to be able to access company information at their fingertips, any time of day. It came as no surprise that Nortel Networks was selected for the best use of technology, as well as best IR web site. Respondents said the site is easy to navigate and they appreciate the use of webcasts to announce new developments. ‘You can go right on the internet and see their presentations live as they speak,’ remarked a survey respondent.
Indeed Nortel was the star of this year’s gala, taking home seven awards including best overall IR by a company with over $1 bn market cap, most improved IR and best communications by senior management. Angela McMonagle, VP of investor relations for Nortel, was on stage so many times she was dubbed the Canadian version of Carlos Santana.
McMonagle thinks there are two reasons the financial community sang such high praises for Nortel this year. ‘One reason is we have had tremendous business performance which is a pretty exciting story in and of itself,’ she says. ‘People have been interested to better understand Nortel if they didn’t before.’
‘On the other hand,’ continues McMonagle, ‘we in IR have put a concerted effort into an active communications program more so than we had been done in the past.’ McMonagle also feels that there was tremendous support from senior management across the organization in recognizing the ‘importance of the investor constituency as a key stakeholder.’
Respondents were most impressed with the company’s ability to communicate clearly. As one analyst commented, ‘They have the ability to boil down the complicated topic of the changing world of telecommunications to simple terms.’ Nortel also received recognition for pulling up its corporate socks over the last year, and becoming ‘the master of the press release, with knowledgeable and available staff.’
But, as with everything in the business world, it’s not where you’ve been, it’s where you’re headed. McMonagle says Nortel’s future will see a move towards ‘broader disclosure by using technology more and more. We will continue to move the yardsticks by enhancing our web site and making it even more user-friendly and having the information more easily packaged,’ she says.
Reading minds
John Rogers, of Suncor Energy, was named best investor relations officer for a large-cap company. He was even cited by survey respondents for his psychic powers – as one fund manager put it, ‘When you are speaking with John, you are assured that he is representing exactly what management is thinking and wants.’
But according to Rogers, he is no mind reader, just a good communicator with a strong management team. By working closely with senior management in developing his story, Rogers sends a clear message to investors. ‘What we do is we take communicating with the investment community very seriously,’ he explains. ‘We feel this very important part of being a public company.’
The recent bounce-back of retail investors means IR practitioners have to make a special effort to reach the moms and pops. BCE came out on top in this category, winning the large-cap award for best IR with the retail market. BCE’s team provides ‘quick responses, well researched, thorough and complete answers,’ expanded one retail investment adviser.
Howard Hendrick, vice president of IR at BCE, says his team uses a ‘variety of ways’ to reach individual investors. ‘Only about 5 percent of our shareholders ask to receive quarterly reports so we need to find other ways to communicate,’ says Hendrick. ‘For example, among other things, we have a 1-800 number to provide direct human contact. We also put lots of information on the web site and go out to visit brokerage offices.’
BCE is also coming up with new retail innovations. ‘We are planning a teleconference with the high net worth clients of a major Canadian brokerage firm as well as a video broadcast with the clients of Edward D Jones, a US retail broker,’ says Hendrick.
Retail investors are coming on strong, according to this IRO, especially in 2000. Indeed one reason for this is the recent success of stocks like BCE and Nortel, he says. ‘For some reason people seem to be choosing these investments over mutual funds these days.’
Flying high
Air Canada was applauded for communicating effectively while fending off a hostile bid by Onex and AMR Corp. It was awarded best investor relations during a takeover, with the investment community most impressed with the company’s ability to communicate to all audiences throughout the fight and the ensuing battle over regulation with the Canadian government. As one fund manager aptly put it, ‘Everyone knew what was going on.’
Valerie Peck, director of investor relations at Air Canada, says the strategy for communicating during the takeover was ‘to make everything as clear and timely as possible and to effectively use every resource available.’
‘Because of the foreign ownership limit on the company, it was a very unusual [takeover] approach in the first place,’ explains Peck. ‘The Canadian public had to be kept informed, the government had to be worked with, and the investors had to be well informed of a fairly complex story,’ she explains.
Now that the battle is over, Peck says the company is pleased with its success. ‘I think we as a company did a very good job at turning out our story quickly.’
Looking to the future
So, after plenty of ego stroking and time enough to reflect on this year’s accomplishments, what should IROs be planning for the future? According to the research, IROs should continue to brush up on their internet skills. When asked how they would like to receive information, analysts expressed a strong desire to have more information available online. And when asked what type of information they are looking for on the net, participants listed off a variety of corporate information beginning with annual or quarterly reports, articles from business publications, product information and corporate descriptions.
The take-home message from this year’s awards is all about beefing up the standard, the timing and the availability of information. The new mantra for IROs, as one analyst summarized, involves ‘quality and timeliness, ensuring objectivity, being non-promotional, and making information available on the internet.’
