Victory at the IR Magazine Awards 2003 never tasted so sweet. After a year of corporate scandals, new regulations, a bitter economy and political turmoil, winners around the globe were especially celebratory this year.
In most regions, one company stood out by taking home the grand prix title and several other awards. These included Microsoft (US), Unilever (UK), Royal Bank (Canada), James Hardie (Australia), Nokia (Nordic), SABMiller (South Africa), Allied Irish Banks (Ireland) and Matáv (Central & Eastern Europe).
Corporate governance
In the wake of corporate scandals, the award for best corporate governance took on new significance this year, particularly in the US. General Electric and Pfizer tied for best corporate governance at the US Awards. GE’s board spent three months revamping the company’s governance program in 2002. ‘We did a very intensive crash course in which the board sought out the best minds on governance,’ says Gary Shaffer, general manager of public affairs at GE.
On the other side of the world, Standard Bank prioritized governance by becoming the first South African company to develop a sustainability report that follows Global Reporting Initiatives Guidelines. Kim Howard, IRO at Standard Bank, told IR magazine the report could not have been completed without the help of senior management. The company was awarded best corporate governance in South Africa in June.
Top dogs
In the US, Viacom’s top dogs, Mel Karmazin, president and COO, and Sumner Redstone, chairman and CEO, were jointly awarded best IR by a chairman, president or CEO. According to Marty Shea, Viacom’s senior VP of IR, both Karmazin and Redstone are committed to disclosure and transparency. ‘They ardently believe that they work for shareholders and that shareholders deserve every piece of information [the company] can possibly provide legally,’ he says.
Having a seat at senior management’s table allows an IRO to stand out with analysts and investors. Dr Rui Avelar, vice president of IR and communications at Angiotech Pharmaceuticals, is part of the company’s senior management team – and this allows him to give ‘more informed answers’ than a regular IRO, he suggests. Avelar took home the award for best IRO in the small-cap category at the IR Magazine Canada Awards.
Greg Baxter, IRO at Sydney-based James Hardie, noted it was his good standing with senior management that led to him picking up the award for best IRO at the IR Magazine Australia Awards for the third year running. Not surprisingly, Baxter’s team took home six other awards this year, including the grand prix.
Nascent IR
Launching an IPO is always challenging, and in today’s market, it can be nigh impossible. Even so, Wood Group not only succeeded in going public – it also caught the investment community’s attention in the process, and won best new issue at the IR Magazine UK Awards. ‘We won because we gave IR an appropriate focus within the IPO program,’ suggests Alan Semple, finance director. ‘We worked hard to understand the investment community and to educate the analyst community.’
Semple advocates taking the ‘boy scout approach’ when launching a successful IPO in tough times – Wood Group held ‘teaching days’ where senior management lectured investors and analysts about the firm’s business and strategies. ‘You can’t control the market, you can only control your part,’ Semple says.
Weathering a storm
Finally, all IR professionals can learn from departments that communicate well during a crisis – and one such company was Allied Irish Banks. Back in February 2002 AIB found out that a rogue trader in Baltimore had hidden around $750 mn in losses at the firm’s US arm, Allfirst. AIB acted quickly, disclosing estimated losses to the Street within 24 hours. By coming clean fast and keeping lines of communication open, AIB was able to weather the storm well. In fact, it took home three awards at the first annual IR Magazine Ireland Awards, including the grand prix for a large-cap company.
Alan Kelly, IRO at AIB, says consistent and honest communication with the Street was pivotal to coming out on top. ‘This could have become much more damaging had we not been seen as open and transparent,’ he notes.
