Listed companies need to do more to take advantage of the opportunities offered by the internet, according to a recent survey by new media consultancy twentysix London. While many IR departments use their web sites to disseminate traditional sources of information that are available elsewhere (such as annual reports and press releases), they are not capitalizing on the potential of the internet to widen the breadth of their communications with investors and analysts.
The research, based on a survey of 50 FTSE 350 IROs and corporate communications professionals, reveals that 86 percent think the corporate web site is a more effective vehicle for investor communications than the annual report. Ninety-eight percent of those surveyed admit that the internet has become a more important IR tool in the last two years, and 84 percent believe that their company will make more use of the internet for investor relations in the future.
However, another part of the study based on responses from 100 fund managers, analysts, high-net-worth private investors and financial journalists suggests companies need to make sure their online strategy is in line with investor needs. As one analyst points out, ‘every single one of my colleagues starts their appraisal at the company’s web site – often the weakest link in the investment appraisal process.’
Almost all corporate web sites provide biographical details about management, but investors want to see more hard information about how board members will add value. Ninetytwo percent of those questioned by twentysix say it is very important that companies try harder to communicate the depth of management and how managers can help grow the business. ‘Where they went to university is all very interesting,’ says one analyst. ‘But I want to know how they add value today and tomorrow.’
Another investor argues that companies need to go beyond the senior directors and explain how executive management contributes to the company’s performance. ‘I have probably come across most of the non-execs at some stage, so their biogs are useless to me – I want more information on the executive management and those who run the profit centers underneath them,’ says this respondent.
Investors want improved content on web sites, but they also want companies to make better use of emerging technology. For example, many IR sites currently offer webcasts of results presentations, but few provide podcasts.
According to the report, 61 percent of investors say they would download a podcast if they thought it was relevant. Half of those surveyed indicate that a management blog would be of interest to them so long as it allowed genuine feedback from stakeholders, and 27 percent say that they would find RSS feeds useful.
And then there are the technological laggards. Eight percent of investors don’t know what blogging is, and 10 percent say they have never heard of podcasting. Even a third of those who do know what podcasting is insist they would never download a corporate podcast – but it’s unclear whether that’s because they’re technophobes or just because they prefer to listen to something more lively than last quarter’s analyst call on their journey home.
