The March 2009 Institutional Investor is a must-read for IROs.
The names of top-ranked firms in 57 industries are reason enough to take a look at “America’s Most Shareholder Friendly Companies,” an II ranking based on relationship evaluations by 675 buy side analysts and portfolio managers. Yes, the list includes some of the market’s longtime “blue chips,” but also a few you might not have considered.
You can check rankings in your industry here for a mini-benchmarking.
But the common themes among top-ranked companies are even more compelling. Beyond working hard on delivering fundamentals amid a tough economy, managements are focusing more than ever on relationships with their investors. Here’s a sampler.
“Any time that circumstances are difficult, it puts that much more stress on providing the right information,” [CEO Gary Kelly] says. “We work hard to establish a baseline understanding of Southwest Airlines’ vision and who we are, and we do the best we can to set reasonable expectations.”
“The thirst for information from investors has grown significantly over the past 12 months,” says Mary Kay Ladone, vice president of investor relations. The challenge, she explains, is trying to find the right balance between “delivering a simple message that allows shareholders to make investment decisions, but not simplifying the message to the extent that we mask some of the uncertainty. This has always been the case, but the current environment has heightened it.”
… she adheres to five basic principles when communicating with shareholders and potential investors: “simple, transparent, responsive, timely and accurate.”
[CEO Thomas] Falk and his investor relations team keep shareholders informed of developments – even when the news is not good – by scheduling regular meetings in the offices of buy-side analysts in major markets and by making themselves available to answer questions. “Good investors are always probing for the soft spots in your strategy and your deliveries,” he says. “They have done their homework.”
Procter & Gamble:
“At the heart of our investor relations approach is the clear understanding that our shareholders are the owners of the company and that we need to be pro-actively responsive to them,” [CFO Jon Moeller] says, adding that P&G hosts investor meetings eight times a year at its headquarters and also attends most major investor conferences. “We make sure they understand our strategy, how we’re competitively advantaged and how we’re building on that.”
You might say it comes down to basics. Companies that execute well on the fundamentals of investor relations – clear communication of strategy, timely disclosure of changes and generous access for shareholders – earn favor and loyalty from the buy side.
And those relationships pay off in an uncertain era.