Firm name: zu.com communications inc.  Date established: 1995 CEO: Ryan Lejbak President: Tony Zuck  Employees: 41

Number of clients: 45  Representative clients: PotashCorp, Cameco, TransCanada, Areva, Pacific & Western Bank, Canadian Oil Sands Trust, Enerflex, Coalcorp, Agrium, Isotechnika, OPTI Canada Inc.

Principal products/services: website design and development, mobile and social media applications. Technologies used: PHP, XML, JavaScript, Ajax, CSS, HTML, MySQL, Flash, AIR, Action Script

Website address: www.zu.com Head office address: 324 Duchess St., Saskatoon, SK, S7K-0R1, Canada

1. What does your firm do? What products or services do you provide?

zu.com communications is an interactive agency specializing in website design and development, content management systems, mobile and social media applications. We provide extensive IR services including: website development, online annual reports, sustainability reports and e-proxies.

2. In what ways does your firm help companies be more effective in their online communications with stakeholders?

We help our clients communicate important and sensitive information with investor-friendly utility and design. We are very fluent in IR terminology. Most IR websites are filing cabinets of information – we take that information and produce a customized, uniquely-designed HTML website tailored to our clients’ audiences. We make it easy for investors to find what they’re looking for.

Is the look and feel of the website credible? Is the navigation usable and consistent? Are all types of disclosure properly represented? Improving any of these deficiencies increases the quality of the communication. We liberate some of the best story-telling and investor proposition materials from the annual report and use them as a skeleton for the online version.

3. What unique problems are you addressing?

The unique problems are often a particular set of deficiencies each company expresses due to a condition in the organization: a manpower shortage, editorial reasons to keep things incomplete or a lack of awareness of the best online IR practices in existence.

4. Tell us about a recent project that you are particularly proud of? Why do you think what you did is effective?

A recent highpoint was the online version of a 10K and e-proxy for a large cap US company. IR Web Report predicted the arrival of this type of project many years ago — particularly the e-proxy portion.

Our effectiveness comes from the way our team pounces on these projects — document conversion to stand-alone websites. We’ve refined the production process, we’re quick and the result is a well-organized and tightly-designed product to existing design standards with thorough quality control.

We’re influencing the way companies look at reporting. We’re also helping the environment by cutting back on wasted paper. Many publicly-traded companies are turning to online reporting for this reason as well as the associated financial savings.

5. What are the biggest challenges your firm faces?

We find ourselves working with larger clients on more complex projects. As a result we are continually adding depth to our team and detail to the management process. We’re often designing and programming for our clients’ content management systems which involves more coordination and testing. Our programmers enjoy the challenge and are happiest when thinking their hardest.

Another current challenge is raw space. Though we’re moving to a new-to-us 1930’s warehouse with 20,000 square feet, we’re currently crammed into about a third of that space.

6. Which other firms similar to yours do you admire or respect and why?

We keep close tabs on IR Web Report as it leads the way in the field; we admire

Critical Mass for their inspirational design work; GeBer Geschäftsberichte inspire us with their swift turnaround time; 37signals wows us for having the guts to try new things like Basecamp and Ruby on Rails.

7. What differentiates your firm from others in the market?

Our team is large and experienced — we’ve been working and consulting in the online IR sector for over a decade. We’re a full-service interactive firm offering a broad spectrum of IR communications: programming, design, Web 2.0 technology, multimedia, mobile, hosting and integrating third party feeds among other services.

8. Are there any future plans for your firm that you want to talk about?

We’re attending the National Investor Relations Institute Conference for the first time in our company history to spread the news about investor-friendly websites. We’re also returning to the Canadian Investor Relations Institute conference for the sixth year in a row. We’re excited about the increasingly stronger embrace of the Internet as a disclosure tool — an area zu has been focusing on for several years.

We’re pushing ahead with mobile developments, anticipating growth in this area. We’re also looking at social media and how it can assist investor relations without creating extra work for users.

9. Is there anything you wish we had asked you but didn’t?

We’re a fun company with a great atmosphere. We’ve created a relaxing, positive work environment where our employees are happy to share a beer on Friday afternoons. Stop by when you are in town.

That’s a really good question and one that every company needs to think about. What are the basic requirements for an IR website?

There are some obvious things, of course. Being up to date is a fundamental. Investors being able to easily find information is a fundamental, albeit one that many companies struggle with.

Today’s leading-edge might be tomorrow’s basic requirement

But there are times when it can be hard to distinguish between a practice or technology that is a basic requirement and something that is optional. What is thought of as leading edge or nice to have today might be a fundamental component of an effective IR website tomorrow, or it might just go out of fashion or be replaced by something else.

Identifying future fundamentals is a big part of our jobs as advisors. We help companies that are planning upgrades for their IR websites identify practices and technologies that are likely to have staying power and which should be incorporated into their sites.

RSS feeds, for example, are still an emerging technology on IR websites and haven’t really taken off with investors. But it’s just a matter of time before they become fundamental components of any IR website and no company should upgrade without feed-enabling their sites.

Fundamental practices often overlooked

Then there are technologies and practices that are fundamental to an effective IR website but most companies don’t do them because they simply haven’t thought about them.

I get a lot of push-back from people when I say this because people think I’m being rude about their intellect or belittling the effort they put into their sites. How could they possibly not be thinking about their sites when they spend so much time making sure content is posted to their sites?

Simple. Because posting content to your site and thinking about your site often are two very different things. At most companies, the IR website is a repository for documents and files that are created for other channels, such as printed annual reports, in-person PowerPoint presentations, or  live teleconference calls.

While all of these end up on the typical IR website, they are not specifically designed for or delivered online in the first instance. So the IR departments that produce them aren’t thinking about the website experience per se. They are thinking about the person leafing through the pages of the report, or the content of a slide and what the CEO should say to the live audience.

While a lot of time might be spent preparing materials and then posting them online, very little time is being spent thinking about how best to deliver the information online. The web is an afterthought.

This lack of focus on the web experience extends beyond the information that companies are in fact posting to the things that they don’t even think about. And they don’t think about them because they don’t do them offline.

But just because so few companies implement these practices does not mean they are leading-edge or nice-to-have.

Case in point: annual meetings

The practice I was discussing with the client was an online annual meeting campaign. Is it really a fundamental, I was asked. Yes, absolutely it is, I said. And it doesn’t matter one bit what your shareholder base looks like.

“Well,” said the client forlornly, “we just had our annual meeting and we put a lot of time into it and we got one question.”

Yes, but they hadn’t done it right, I said. Everything happened offline and they just dumped the materials on the site without thinking.

Saying this never makes me popular, but it has to be said. And then I quickly added the bit that positively confounds people.

Even if they had done it properly and investors still didn’t seem interested, that does not make an online annual meeting campaign any less important to an effective IR website.

Why? Because how you treat your company’s owners on the web says a lot about a company’s attitude to all of its other stakeholders.

Think about that for moment. If a company claims that it is focused on good governance but it ignores its annual meeting, how much weight do you put on its governance claims?

If it has a CEO blog but ignores how it treats its annual meeting, is that blog for real or just window dressing? And if a company has a customer idea board but ignores its shareholders, is it really interested in what customers have to say or is it just a publicity stunt?

No, if a company doesn’t give a damn about its annual meeting of shareholders — the people with the power to throw out the board and management — what exactly does it give a damn about?

Its employees? Its customers? Regulators, the law, the environment?

As for my client, she didn’t like what I was saying because it means more work for a department that is already stretched thin. But come next year I fully expect they’ll do much more around their annual meeting on the web.

It’s becoming increasingly clear to me that regulators are going to be at the center of the disclosure dissemination universe. Regulators like the Securities and Exchange Commission (SEC) are going to become more and more technology-based organizations on top of being places filled with legal and financial people.

Think of the SEC as the “Google” of interactive financial data, and you’ll get the picture.

This presents a real problem for other players in the global capital markets who are not as tech savvy. The UK’s FSA is one such stakeholder. So are Canada’s regulators. They’re going to be left behind. Things are changing too fast for them.

And then there are the IR departments and the professionals who staff them. Most of them have failed to keep up with web technology due to an unhealthy reliance on big, complacent vendors. They outsourced their brains as well as the technology. 

Some people, like this guy, argue that it’s not the job of IROs to be technology savvy. They’re wrong. Knowing the difference between a .gif and text is core to being an effective IRO in 2008. Knowing what an RSS feed is may be even more important. Understanding when it’s okay to delete a blog comment is vital know-how.

Which brings me to the inquiry I received from the SEC this week. It was an email from Mark Story, Investor Communications Manager in the Office of Investor Education and Advocacy. He’s the guy who handled the logistics around last week’s blogger conference call.

Here’s what he wanted to know:

• We are considering holding a live “chat” directly from the open commission hearing.  Would you be interested in participating?  We would provide the technology.
• For those who are interested in XBRL more from a techie perspective, we are also considering using Twitter and doing “tweets” from the hearing.  Are you a subscriber to Twitter?
• Do you ever listen to http://www.blogtalkradio.com/ ? This could be a potential venue for XBRL discussions.  Again, these are all ideas, but, as David said, we learned as much from you as you learned from us last week.
• Finally, are there other “A-List” bloggers such as yourself who might be interested in participating in any of the above?

This made me smile and shudder at the same time. I found it wickedly amusing because I’m well aware that almost no one with corporate IR influence knows much about Twitter or Blog Talk Radio. But the SEC does.

And it made me shudder because I realized that even I hadn’t been paying enough attention to using these tools. They’re just too far out in front of the people I communicate with and consult to. Most people who read this blog aren’t even comfortable using RSS.

Twitter? Well, that’s not even on the radar.

Things are changing. And as Tim Bray said this week, they’re changing right now. 

Don’t know who Tim Bray is do you?

The SEC does.

This is something I’ve been meaning to write about for the past two years but never got around to. We’ve been telling clients privately that it is a dumb practice, and most of them have either never required registration or they have removed RSS registration after hearing why it’s a bad idea.

Interestingly, the company I just happened to use as an example for the poll, Southern Company, decided to remove the registration requirement from its feeds after the post on Tuesday. Good for them.

But here’s what you might not know: Southern Company is by no means alone. Many other companies require investors to register to access RSS feeds on their sites. You can see a quick sampling of them at the end of this post.

All of these companies have one thing in common — they all are using the IR website product of NASDAQ OMX Group’s  Shareholder.com.

After our earlier post this week, Southern Company removed the registration requirement for its investor RSS feeds.

Registration used to compile intelligence on analysts

Making people register to access RSS feeds for investor relations information has been the default setting for Shareholder.com’s website product ever since the firm introduced feeds to its clients’ sites.

I forget precisely when they introduced feeds, but it wasn’t long after the Sept. 2004 launch of their Pinpoint Intelligence product, which listed “mining shareholder communication activity” from IR websites as one of its most important benefits.

I’ve written a lot about the Pinpoint Intelligence suite in the past. It’s the product I call the “spy suite” because it has extraordinarily invasive web tracking features. Companies can compile detailed dossiers on the web activity of individual analysts and investors who use their sites.

I’m bringing this up again because the registration screens for RSS feeds and other content on these Shareholder.com sites are integral to Pinpoint Intelligence working effectively. If visitors do not give companies their names, then the information Shareholder.com collects is anonymous. It cannot be used to create useful dossiers for the company on those particular users.

So that’s why Southern Company and scores of others have those registration screens.

Breaking web design fundamentals drives investors elsewhere

A problem crops up when you put barriers like unnecessary registration forms in the way of people using your site. Many will just avoid using the content or they’ll go elsewhere for it.

That’s what has happened here. Shareholder.com designed its IR website product for the wrong audience. They designed it to be attractive to investor relations departments, not those departments’ clients — the analysts and investors who are supposed to use the websites.

Designing for someone other than the end-user is bad web design. Websites must work for the end-user or they will fail to be effective for the company. Sites that aren’t useful and easy-to-use simply won’t be utilized as often as better sites. Being human, analysts and investors will follow a path of least resistance to get their information.

Consequently, the registration pages that Shareholder.com uses to capture names have had the predictable effect of discouraging investors from using companies’ RSS feeds, which are important tools for companies to stay in touch with their investors and analysts.

Public RSS subscriber numbers prove the point

As Ryan Lejbak said in a comment here this week, faced with a registration screen “absolutely no one will sign up” for the RSS feeds.

He’s actually not far wrong. We know something about how much Southern Company’s feeds are being used because some web-based RSS readers, such as Google Reader and Bloglines, show how many of their users have subscribed to particular feeds. It’s public information.

As you can see from the screenshot below, Southern Company’s financial news and SEC filings feeds have only one subscriber each at Bloglines, which is one of the biggest online RSS readers. I couldn’t find the feeds listed at Google, suggesting that no one there is subscribed.

Search results from Bloglines show only one subscriber each for these two Southern Company feeds hosted by Shareholder.com.

However, I did see more subscribers for feeds from other sites that carry news about Southern Company. Investors are subscribing to feeds at Yahoo! Finance, for example, where there is no registration requirement.

The numbers are not huge, but then that might be saying more about Southern Company than investors’ use of RSS. You need to see that in context of the fact that a website like TheStreet.com has 508,000 RSS subscribers using Google Reader, so there are investors out there who know what an RSS feed is.

Another important thing to notice about the above screenshot is that the feeds are public. Investors and analysts don’t need to go to a company’s website to register for access to the feeds. Once one person subscribes to a feed in a web reader like Bloglines or Google Reader, that RSS feed is public and anyone can subscribe to it unless it uses some kind of authentication, which is inappropriate for public websites. That means Shareholder.com’s registration pages aren’t effective anyway.

What were they thinking? They weren’t.

The irony is that a product meant to give IR departments unprecedented intelligence on investors’ and analysts’ website activity has ended up chasing away investors to other services. Consequently, companies are probably left with even less information than they would have had if they’d just stopped to ask questions.

And IR departments were paying between $12,000 and $24,000 per year for the privilege when the product first launched in 2004. It might be more or less now, but whatever it is, it’s too much.

Not only that, companies also exposed themselves to potential reputation risk by using the Pinpoint Intelligence product suite. Privacy is a big issue for web users generally, but especially for investors and analysts who don’t want people looking over their shoulders to see what they’re looking at.

It’s no coincidence that the SEC made shareholder anonymity a key provision of the E-proxy rules, effectively making Pinpoint Intelligence a compliance problem for companies. That has driven up costs for companies that have sought alternative hosting space on sites that don’t pry into investors’ private website activity.

I know this seems like a long post to write about registration pages for IR websites, but that’s the story behind the now-gone RSS registration page at Southern Company and the ones that remain on the IR websites of dozens of companies, including those captured below.

There are a number of stories like this that I sit on for years and never write about publicly. This is a mild one. Wait until I tell you the story about Thomson Financial and the ….

OKAY, you have to pay $1.90 (see comments below) for postage and handling and it has to ship to an address in the US, but the book itself is “free.”

Hitachi America’s XBRL Business Unit, one of the leaders in deep enterprise implementations of XBRL, is giving it away out of the goodness of their marketing budget.

According to the promo, it is only 84 pages, but it packs in the information that financial professionals need to understand XBRL and its role in the upcoming SEC mandates for financial reporting. 

There should be demand for this freebie because a study last year by Grant Thornton LLP found that almost half of senior finance executives did not know about XBRL.

Copies of the book are only available online by visiting https://store.nationalmailing.com/xbrl/default.php?order.

Hitachi is a pioneer in the development of XBRL products and services. It has developed its own offerings and also partners with systems integrators, auditing firms, and service providers. The company has working partnerships with Merrill Corporation and PricewaterhouseCoopers.

Hitachi America, Ltd. XBRL Business Unit focuses on developing business relationships with four types of companies:

• those who want to reduce their time for financial analysis and reporting;
• those with multiple divisions that are in a merger/acquisition process;
• those trading on foreign or multinational exchanges; and,
• those that want to be perceived as leaders in technology adoption.

A copy of the business unit’s white paper “The XBRL-Enabled Company” can be downloaded at www.hitachi.us/XBRL.

As I have already mentioned, the publication — which is free for this year — is edited by former SEC attorney Broc Romanek, who also is also editor for TheCorporateCounsel.net.

The first issue is full of practical tips, but having just completed reading a great article on avoiding the biggest notice-only E-proxy pitfalls, I wanted to summarize the highlights for you here.

1. Don’t Overestimate Cost Savings

Do the analysis for yourself. You need to do your own homework because there is a lot of misinformation out there. Beware of underestimating your print needs because doing a second print-run can be cost prohibitive.

2. Compress Your Time & Responsibility Schedule

For most companies, the timeline is a significant departure from past years. Not only must the proxy materials be completed earlier, but board and management meetings related to approving the materials must be held much earlier. There are big changes that ripple all throughout your Time & Responsibility Schedule.

3. Become a “Usability” Master

The bottom line is to not rely on service providers to control what is becoming an increasingly important aspect of the corporate IR strategy. Since you should be “selling” the company to investors, the IR webpage should be considered as important a page on the corporate website. Convince your boss to plow back some of the e-proxy cost savings into the IR budget so that you can improve your IR webpage and related communication strategy.

4. Don’t Neglect Your Employee-Shareholders

A separate campaign strategy should be considered when targeting employees. Consider what they might value differently than other shareholders.

5. Be Prepared for the Unexpected

Under the new e-proxy rules, activists and dissidents can e-proxy even if the company doesn’t. The sudden appearance of a rival “campaign” can quickly earn publicity and catch you unaware. A rival campaign doesn’t necessarily mean a proxy contest; there are much “lesser” versions that can cause problems.

6. View E-Proxy as an Opportunity

Going forward, the bottom line is that your mantra should be: “Drive investors to my IR webpage at every opportunity, make them comfortable with the experience, get their feedback and constantly improve the experience.”

The article itself provides a lot more detail on each of these points. You can receive the complete first issue of InvestorRelationships.com after a free sign-up.

Firm name: Twentysix London Date established: 1998 CEO/President: Gail Dudleston Employees: 93 in the UK

Number of clients: 72  Representative clients: Shell, Procter & Gamble, RBS Group, Royal Navy/Marines, Waitrose, Barratt, Investec, Sodexho, Abercrombie & Kent, BP etc

Principal products/services: Full service digital agency (we do not do search or media buying though). Technologies: ASP.net (MS Certified Partner); Full L.A.M.P services; MOSS to SharePoint 07; JAVA; Oracle; Action Script; CMS integration (enterprise and bespoke); System integration; Business analysis; Hosting solution and infrastructure architecture; Support.

Website address: www.twentysixlondon.com  Head office address: Eldon House, 1 Dorset Street, London, W1U 4EG

1. What does your firm do?

Twentysix London is an award winning top ten full service digital agency working with leading UK and international brands. Our services include planning/research, user-centred creative, technical consultancy and development, design and build, digital corporate communications and digital marketing.

Ian Anderson

2. How does your firm help companies be more effective on the web?

Twentysix has always broken the mold in financial corporate communications. We wrote the original UK best practice awards for the UK IR Society, published the definitive book in online IR (real relations, virtual world), and have published a significant amount of research into investor’s real needs without a hidden agenda to sell new services.

We do not develop ‘out of the box’ solutions for IR teams uninterested in achieving the very best for their investors — we leave that to the other UK agencies satisfied in developing $25,000 vanilla services.

We believe that investors deserve more. We believe that your company should develop a user-centered solution that satisfies all user needs and transparently explain why they should become, or remain invested in your company.

That takes time, money and the desire to be the best.

3. Tell us about a recent project that you are particularly proud of?

At BP we developed the information architecture and web content matrix ‘five’ years ago. It is such a success, they have never changed it.

In the consumer field Waitrose.com — transforming middle-aged English ladies to web 2.0, convincing the Managing Director to blog and developing the largest online recipe and forum food site in Europe.

The Waitrose MD blog.

4. What are the biggest challenges your firm faces?

Most IR professionals do not understand the Internet, or how to market their business through no fault of their own — they simply have never been exposed to the discipline.

Most have a sheep-like mentality to do no more, or less, than their peers. This drives complacency and creates disingenuous solutions for investors.

5. Which other firms similar to yours do you admire or respect?

We don’t. You either have tool suppliers selling solutions nobody needs, print companies desperate to retain revenues who have rushed together online solutions usually led by an online annual report, or PR/IR firms developing loss leader solutions to retain client revenues.

6. What differentiates your firm from others in the market?

We are a pure digital user centered design agency and develop solutions for a wide range of global brands both consumer and business focussed.

What we learn is ploughed back into the investor solutions.

7. Are there any future plans for your firm that you want to talk about?

China is interesting.

Why, in America, of course. This happens in elections of corporate directors under something called broker non-votes, which the New York Stock Exchange (NYSE) has asked to be scrapped, but the Securities and Exchange Commission (SEC) has inexplicably failed to even put it out for public comment it since 2006.

Neal Lipschutz, senior vice president and managing editor of Dow Jones Newswires, writes: “In a testament to how long some corporate governance controversies can bounce around, the so-called “broker vote” issue is still alive if not altogether well after years of debate. It should have long ago been relegated to history.”

William Patterson, Executive Director of CtW, the investment arm of the Change to Win labor federation, has written to SEC Chairman Chris Cox urging the commission to approve the NYSE proposal to eliminate uninstructed broker votes in director elections.

“Since many brokers support management as a matter of policy, their ability to exercise discretion over certain uninstructed client shares has been criticized as “legalized ballot stuffing” by parties who don’t share investors’ economic interests,” he writes.

People who disagree that ballot stuffing is bad seem to be very thin on the ground. They are apparently high up in corporate ivory towers or in guarded palaces in a third-world country called Zimbabwe. 

But rather than say what I think the word is, I thought you might like to have a quick guess using the poll embedded below the screenshot.

I will reveal my choice tomorrow along with a full explanation. But what do you think? Vote now

No matter where you are in the world, we want to give you an opportunity to talk about your company and its products on this site. No strings attached. No cost. I’ve already sent off three invites, but let’s open it up to anyone.

You just have to be doing new things that are interesting to us and we have to feel comfortable with your products. So no image-based junk, instant Flash paper conversions or stuff like that. This is the age of XBRL, so no firm that is serious about the web would still be putting text in files that can’t be read and indexed by machines.

We want to promote talented, creative, honest, hard working firms that find it hard to get their work noticed. The only condition is that you have to be doing something for companies that involves the web.

If you think you’re interesting or know of a firm that is, send along their info to our general email inbox. Give us a URL or two, a short — twitter length — summary of why the company is interesting, and info for the person we should contact.

Look forward to receiving your suggestions.