IR Websites Replace Phone for Fund Manager

By Dominic Jones

REAL IR, the investor relations magazine focused on Europe, has an interesting cover story this month that shines a spotlight on investors’ ever increasing expectations for IR websites.

In the article, Niall Paul, 34, who overseas $64 billion in equities for Morley Fund Management in London, says that just over half of the IR websites he uses meet his requirements.

And he warns that companies need to shape up because “the benchmark is rising fast and not everyone gets it.”

In his editorial for the November issue, editor Scott Payton declares that the current understanding of what constitutes “best practice” for IR websites is obsolete. He urges companies to be more innovative and pioneering in their approaches to their websites.

A core tool

I couldn’t agree more. It’s clear from this article and from a wide range of other evidence that a new generation of investors — and corporate managers — are coming to the fore, and they demand much more from the Web than firms are providing.

For this generation, the Web is not something new or cool. It is a core communication tool, something they rely on as much as the previous generation relied on the telephone.

This generation expects that when important news or even rumors are breaking in an industry that IR departments won’t wait for the phone to ring. They expect IROs to be proactive in providing their companies’ perspectives on the Web.

“If there are rumors about a company, we need to understand quickly what the company’s position is. If it has a well-resourced website there will either be an explanation or nothing at all, from which we can deduce that the rumor is not worth a mention,” Paul tells the magazine.

Companies also must be more proactive in anticipating investors’ questions. Paul says he would like to see companies provide topical FAQs that answer key questions so his analysts and managers don’t have to get on the phone to IR.

“This saves us a lot of time. We could talk directly to IR, but they will be getting the same calls from lots of similar people and are likely to be inundated. It helps all of us if the questions can be anticipated,” Paul tells Real IR.

Avoid uneven treatment

The fund manager, whose firm manages equities across Europe, Asia and the US, also alludes to uneven disclosure practices that in the past mostly disadvantaged retail investors.

“The last thing you want is to read about an analyst briefing in New York in tomorrow’s newspapers,” Paul tells the magazine. “Although, to be fair, that happens far less frequently now.”

So how many companies are providing websites that meet his needs? “More than half of companies worldwide are getting it right,” Paul tells Real IR. “But the benchmark is rising and the cutting-edge of two years ago is now run-of-the-mill.”

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