Carl Jung called it ‘synchronicity’, so did the Police – a way to describe the parallel development of the same idea in distant places. A particular type of hat appears in Europe and Polynesia during the middle ages, for example, one made out of bronze, the other of bark and feathers. Clearly, they are the same hat, but with no way the two hatters could have compared designs.
Communication is a lot easier in this millennium, with much cross-fertilization going on in our global economy. Nonetheless, the emergence of new disclosure guidelines in distant regions looks like synchronicity.
From different starting points and in different contexts, several markets are arriving at very similar systems of disclosure. Canada and Australia are each putting the finishing touches on systems of ‘continuous disclosure’. In Canada that means each company maintaining a constantly updated record of prospectus-level quality – kind of a daily report in addition to the annual and quarterly ones. Dipping into the capital markets will be easy and fast and won’t require a whole new offering document. That’s clearly a plus for IROs.
In a sense Canada and Australia are leap-frogging the US with their new disclosure systems. Despite some positives, though, all three countries are moving toward putting companies in an awkward position. The US, for example, is suggesting companies secure confidentiality agreements from analysts and investors before certain briefings. Imagine getting a room full of busy pros to endorse such a document – sign it or leave. Australia wants companies to post full transcripts of all analyst meetings and Q&As, making stenography a hot new career there. And Canada is aligning its selective disclosure safeguards with statutory liability for officers and directors.
All this regulatory maneuvering is happening amid a revolution in IR that is occurring with or without government intervention. Surveys of IR practices conducted by Niri in the US, Computershare Analytics in Australia and the Ontario Securities Commission itself, all show companies fast embracing the web to level the information playing field and avoid selective disclosure.
There is a danger that wrapping investor relations up in restrictions and demands will cause companies to pull back from maximum disclosure, supplying the bare minimum to avoid a myriad of nitpicky compliance details. Indeed, along with a convergence in IR guidelines, there is a synchronous chill threatening companies in distant parts of the globe. IROs, wherever they are, should think alike on this.
