The fourth annual Investor Relations Magazine Canada Awards at Toronto’s Royal York in February was tinged with sentiments of warmth and accomplishment for the IROs, CFOs, CEOs and corporate communicators in attendance. There was a sense that IR in Canada has taken its place in the hearts and minds of senior management teams, financial media, analysts and investors across the country. And whether it was the live television coverage of the awards ceremony by ROB TV, or the fact that the ‘grande dame’ of Canadian IR was receiving a special tribute, the entire evening was laden with a special buzz.
Changing landscape
This year’s Canadian survey, conducted by Decision Resources (now part of Kroll Associates), not only identifies the award winners but offers interesting insights into the country’s changing financial landscape. ‘The continuities with previous years’ research results are notable but even more intriguing are the changes,’ notes Carolyn Vose, senior VP of Decision Resources. ‘The recent insurance demutualizations created able new competitors, most notably Manulife. And at the same time, recent M&A caused familiar players like Crestar, Agra, Newbridge Networks, MacBlo, Imasco and others to disappear.’
‘It’s easy to see who has won awards but the interesting thing to look at is how the requirements of analysts and investors may be evolving,’ adds Vose. For example, 86 percent of respondents claimed access to management as their most critical source of company information. Corporate web sites, on the other hand, scored relatively low as an information source for these analysts, portfolio managers and institutional investors. ‘The other interesting finding was that almost a third of analysts and portfolio managers monitor chat rooms or bulletin boards,’ says Vose. ‘That is a signal to the Canadian IR community that they must be in tune with what is being said out there even if they’re not going to respond.’
Mom & pop
This year’s Canadian survey polled over 300 individual investors as well as professional investors. In the category of best communications with the retail market, retail investors singled out telecom giant BCE for its thorough, clear communications.
‘We are obviously thrilled with this award because 50 percent of our shareholder base is retail,’ says Maarika Paul, senior VP of IR at BCE. ‘Many of our retail shareholders feel quite close to our company because a lot of them are employees and retired pensioners.’ According to Paul, most of BCE’s communications with the retail community last year were devoted to explaining the spin-off of its large stake in Nortel Networks. ‘Shareholders needed to examine the tax consequences of the spin-off and how they were going to attribute things,’ she says. ‘We put out FAQ on the Nortel transaction on our web site and gave an example of how to calculate the tax impact.’
Nascent stages
Highlighting the trend of bringing IROs in at the nascent stages of company development, a new award was added to this year’s Canadian gala: best IR for an IPO. The award was presented to Sun Life Financial Services, which demutualized in March 2000. ‘A year ago today we were on the road,’ recalls Tom Rice who joined the company five months prior to its IPO as VP of IR. As one of Canada’s largest life insurers, communicating the IPO process meant explaining what becoming a shareholder would mean to thousands of policyholders. ‘The key was to keep it simple – identify a handful of messages which were relevant to both the reality of the story and the decision-making process of shareholders,’ offers Rice.
‘When you are doing an IPO your hands are tied because you can only say what’s in the prospectus,’ notes Rice. ‘We developed a structured presentation highlighting the key issues surrounding the stock and then went out on the road for three and half weeks.’ Rice says Sun Life Financial Services had two teams conducting roadshows, ‘The CEO and CFO ran one team and the president and retiring CEO ran the second team.’
Sun Life was also recognized for having made its market debut during a lull in IPOs. As one respondent put it, ‘Last March was a tough time to come to market but they did a good job addressing concerns and priced the issue to build interest.’
Proactive IR
Matthew Bogart, winner of the best IRO for a company under $1 bn in market cap, identifies himself as ‘the person who came in and initiated all IR programs at Janna Systems [now Siebel Janna].’ Previously, all IR was reactive rather than proactive, he says. Janna Systems listed on the TSE in December 1999 and was subsequently acquired by California-based Siebel Systems in September 2000. ‘Janna was doing a very good job at getting into a small niche of the technology market but there was still an overbearing knowledge that Siebel was the dominant force,’ admits Bogart. ‘So, when it came to educating shareholders about the acquisition, we made sure we had the right messages and tried to ensure everyone was happy with what was being promoted.’
According to the Canadian research report, award-winning IROs are singled out for their efficiency and accessibility.
As one respondent said of Bogart, ‘He is always able to answer questions, no matter how technical or how hectic things are.’ That means good logistics and good organization. ‘You don’t necessarily want to wait for questions to be asked before you know where the answers are going to be found,’ suggests Bogart.
Grande dame
The star of this year’s Canadian awards was Isabel Mulligan, senior VP of investor relations at Barrick Gold and recipient of the second annual lifetime achievement award in investor relations. A pillar of Canada’s IR community, Mulligan received a standing ovation as she walked to the stage to make her acceptance speech. ‘I feel wonderful; it’s very nice to receive this peer recognition and come back and say thank-you for the award I received three years ago,’ she said. Mulligan received the award for best IRO in 1998, but couldn’t attend due to illness.
‘The IR profession has grown so much in Canada; it’s nice to have an event that puts it in the forefront and makes senior management teams and corporations take notice of IR and how important it is to their companies,’ Mulligan added.
Joey Brown, president of the Canadian Investor Relations Institute and winner of last year’s lifetime achievement award, attests to Mulligan’s merit. ‘She was always ahead of the game in terms of knowing who the best service providers were and she always took time to talk to people; it was her personal commitment to improving the profession that made her winning the award so appropriate,’ she summarizes.
Close contact
One of the most gratifying awards for an IRO is most improved IR. This year’s recipient was Molson, one of Canada’s signature brewing companies. Survey respondents were impressed by the IR team’s ability to establish close contact with investors and enhance disclosure. ‘A lot of hard work went into the IR program and it really helps to have the CEO and the whole management team behind you,’ says John Paul Macdonald, VP of corporate affairs. ‘Our CEO is very proactive. He insists on sending the message out to the Street himself but also allows for input from myself and the team. It’s a good match.’
Macdonald reports a strong effort to follow through with strategies over the last year. ‘We all know the Street doesn’t like surprises so we outlined to them exactly what we intended to do and kept them up-to-date every quarter on our progress,’ he says. ‘Every now and again, when we had a bit of a surprise, we made sure we raised the bar and made our targets even more challenging and I think the Street appreciated that.’ Molson’s IR department also worked hard on its responsiveness, says Macdonald. ‘When someone calls, we call them back the same day with the information they want, be they financial media, an investor, or an analyst. And if we don’t have the answer, we tell them we’ll get back to them the next day.’
Coming of age
The 2001 Canada Awards bore witness to a professional IR community’s coming of age in a country where vast geography and testy climates force tiny pockets of genius to emerge – pockets of genius often spearheaded by the bold actions of a few dedicated individuals like this year’s lifetime achievement recipient, Belle Mulligan.
Mulligan’s professional creed offers insight into the history of Canada’s IR community: ‘I have always pushed and thought about IR strategically and have always thought that you had to get your message straight first, and then you tell it.’ Getting the message straight at this year’s Canadian gala was about understanding the mentoring role which many of Canada’s finest IR professionals have adopted along the way. As Mulligan says, ‘I have always felt that the people you help today are the people who will help you tomorrow.’
The Canada Research Report 2001 is published by Investor Relations magazine at C$225 (C$275 to non-subscibers).
Go to irawards.com or call Gabriel Barbaro at 212-425 9649.
To see the Award Winners click here
Top notch
Consistent with last year’s results, the Canada 2001 survey revealed that the IR professional’s target audience of analysts, portfolio managers and investors are looking for timeliness, responsiveness and up-to-date information. Vermilion Resources, Grand Prix winner for best overall investor relations for a company with $300 mn-$1 bn market cap, was able to meet those requirements. As one respondent said, ‘Response is always prompt, courteous and reliable; a good job overall.’ Heather Strang, manager of corporate communications for Vermilion Resources, attributes much of the IR department’s success ‘to strong support from senior management’. ‘Our CEO and president, Jeff Boyce, is constantly talking to our shareholders; he always returns their calls whether it’s a shareholder with 500 shares or a large portfolio,’ says Strang. ‘He makes my job a whole lot easier.’
Essential ingredients
Nortel Networks took home four awards this year: the Grand Prix for best overall investor relations for a company with over $10 bn market cap and the awards for best IR by a CEO, best investor relations in the US market by a Canadian company and best investor relations web site.
