Wonders of the web

What Constitutes good IR Practice on the Web?

Michael Reilly Dons his surfing gear to find out.

A place on the Internet has become an essential part of corporate communications for thousands of companies around the world. At first look, the concept of having a good site seems reasonably straight forward to the IR officer: gather some company data, put it in an attractive and useful package and hand it all to a techy who knows what to do.
A fine approach, true enough. But the devil, as always, is in the detail and at every step, the number of details is daunting with this new communications channel.

How long a list do we make? That depends on your company, your industry, your attitude and many more things, including knowledge of design, content flow, data organization, software, hardware, the Internet, etc., etc.

And, meanwhile, the Internet beast is transforming with new software, new vendors and not much quantitative information to go on.

So what is a poor IRO to do? Well, you could learn it all, but that will take more lifetimes than most of us are ready to live before the deadline of getting the site up and running. You could trust your friends, your colleagues, your consultants (if there is a budget for them) or find a way to do it from the desktop. The consultant route or in-house group usually is what prevails, often with guidance that "we have a team that knows ‘the net.’" or that "our consultants have already built 55 award-winning sites."

But here comes that devilish detail again. Just who is on the team? Are the PR folks there? Is the legal department on board? Is MIS running things? Who decides finally, what goes on and what does not?

And what about those consultants? Are they trained in design, data loading, network organization, navigational systems, information flow, visual dynamics, Internet topography, etc., etc.? Who made those awards? What do they know? Are you sure?

Just some examples of the many questions to ask -- some of which may not apply to all IROs, but which represent underlying issues that must be considered by any communicating company.

Questions, Questions

Unfortunately, the team will not have all the answers, the consultants will not have all the answers, and the judges will not. In fact, no one has all the answers. Now that is not all bad news because the whole medium is evolving, and evolving at light speed.

It stands to reason no one knows it all. However, I don’t recommend trying to tell that to the CEO who just called about your competitor’s "award-winning: website," demanding, "where is ours?!"

Again, the question: what is a poor IRO to do?

Well, in the interest of preventing premature and/or involuntary retirement from the human race, here are a few ideas that should lead to getting it right, at least for now. You will have to decide the best way forward for your circumstances.

The views set forth are gathered from two strands - a long career in the information business spanning everything from on-air TV broadcasting to information product design at the world’s foremost electronic publisher; and, nearly 12 years practicing or overseeing international investor relations.

And lately, a third strand. Having personally examined more than 250 sites put up by global corporations as home page based -- that is, ostensibly representing the company as a whole -- I have developed a list of best practices. Here is what seems to make sense in October of 1996 based on a moderate sample of the many hundreds of corporate sites now running.

Knowledge Base

I start from the simple premise that I have some knowledge of what an investor is looking for. I do some investing myself and have spent years tending to a rather substantial flock of institutional portfolio managers, analysts, research directors, brokers and assorted hangers-on.

I then put myself in the shoes of the other users: employees, fellow managers, competitors, boards of directors, CEOs, CFOs and regulators, vendors, suppliers, clients and end-users.

Now this points up one of the problems of the whole concept. Who is the audience? So let’s make that best practice number one: Know your audience. This means deciding whom you wish to serve. It could be the CEO or it could be those pesky analysts, or it could be the owners. In my look at things, I tend heavily toward owners, and heavily to big ones. But the recommendations at least give a nod to many viewers and users.

After the audience, comes the audience. That is, talk to them. Do some research (number two best practice). Find out what they really would like in their wildest imaginations, and what they would actually use in their less wild imaginations. And while you are at it, you might ask whether they will use it regularly. This will bring some surprising answers which could make you believe you shouldn’t be doing this. But don’t be misled. A major rule of information provision is that good information will be found and used. And keep in mind what the CEO said.

Here then is a list of things that appear on the better sites, keeping in mind there is an American bias which arises from both a robust communications environment and the strongest disclosure rules in the world:

Basic Bits

Start with a couple of years worth of annual reports, either in total or excerpted - but be careful with excerpts of numbers, most serious inquirers are irritated at a summary, they want all the numbers and they want them downloadable, something only a few sites currently provide.

-The latest quarterly or half-yearly reports. Full text and numerical press releases with tables are preferable. Again, down-loadable.

- Other press releases, a list of the last year’s is useful; or you can sample carefully.

- A description of the investment story. Colgate does it best at www.colgate.com, starting at the Home page with an IR pointer front and center. Once on the IR section, it gets right to the point -- there one finds "the story." Yes! believe it or not, almost no one says: "This is the investment story."

A description of the company (not necessarily the same as above). Where it stands, where it came from, what it sells, who runs . Lot’s of room for creativity here, but try to keep each bit simple. Waiting for long, lovely pages to appear on screen requires a long novel in hand - something few portfolio managers like while positioned in front of a PC. This not only involves what you generally disclose, but bears on the design issues. See Nokia’s pages www.nokia.com for deft handling of light graphics and well summarized information, copious as it is.

Design Issues

A map. A site map that is. This is not only an IR issue but an overall technological/design issue. However, it is crucial to keeping your customer happy. There is nothing worse than running down a tree of information to the fourth quarter of a particular year, then discovering you are layers away from the home page without an easy way back! One simple response is putting pointers home on all pages - an easy-to-add, but often overlooked, feature.

See DaimlerChrysler at www.daimler-benz.com for overall elegance in navigation as well as superior overall design, and look at www.uunet.com from the technical wizards at UUNet Inc. for a good schematic-like map example.

While on design, please consider your audience’s hardware, not necessarily doing what the MIS or marketing folks demand as seen on www.disney.com. Super whiz-bang, just released 3-D dancing dervishes with 6,000 colors, sound and motion software and quick-release brakes is not for everyone. Ask your audience.

Some people will see junk or nothing when they call up sites with the latest stuff, because they don't have the software and hardware to handle it. If you are a high-tech company that wants to transmit an image of pizzazz, fine, go ahead; but make some simple versions easily available on first inquiry for the Volkswagens out there - or your audience will turn you off in disgust.

Image

Now, a word about image, an amazingly unrecognized aspect of the joy of digitizing. Your company may spend millions to influence and maintain image in newspapers, magazines and countless other places. This Internet thing is your image channel, too! In fact, this is a sophisticated audience full of upscale, wealthy thought-leaders and the next generation thereof. You should get it right the first time.

Many sites are miserable in handling corporate image. It is clear that people too far down the chain are playing in this sandbox and one can only wonder what will happen when the light goes on in the executive suite.

I won’t name names in the bad category, it’s too large and too embarrassing. But a few of the good ones?

Most of those mentioned elsewhere in this article qualify, plus: ABB at www.abb.com; Bolt, Baranek and Newman at www.bbn.com; Philips at www.philips.com and Microsoft and Intel at www.microsoft.com and www.intel.com, respectively -- are clearly are paying attention to design, ease of use, needs and wants of the user.

Other areas

Some other good additions, depending on corporate attitudes, shareholders being served and the constraints of budget, include:

Making the chief executive available for questions - probably best done by e-mail rather than chat room, but the bold can do the latter a la some media and technology sites now operating;

-Personalizing software which creates information from the site according to visitor-created profiles. Texas Instruments has done this at www.ti.com.

-multiple language versions of the information, pointers to either onsite or offsite marketing and product sections, stock quotes, SEC filings, industry related pages, many of which features you will see on sites mentioned here.

Texts of speeches and white papers given at industry conferences are terrific in the technology sector; why not elsewhere? Also in downloadable form, please.

All of these add to the total package that will assist an inquiring portfolio manager, analyst or shareholder. And a well designed, content-rich site sends another message; that you want to communicate well; always a comfort, especially to investors far away from your head office.

One must recognize that all the tools of the trade offered by professional vendors and available to many top institutions will not be readily to hand without great expense. But the content directed by you can tip the balance of interest. Your site may not be an alternative to nicely packaged commercial offerings for the most sophisticated researcher, but by being responsive to these interests it can not only challenge the mightiest information companies, but tell your investment story your way.

[Taken From: Investor Relations Februrary 1997]

© Copyright 1997, 2001 Hally Enterprises, Inc.