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How format choices undermine equal access
A founding principle of the capital markets is that all participants should have equal access to information. It's a principle behind the SEC's Regulation Fair Disclosure. Intended to make disclosure fair and equal for all investors, the rule resulted in the laudable practice of companies opening up their conference calls and investor presentations to all.

But while most investors now have access to conference calls and investor presentations, their access in practice is still not equal. Institutional investors are being given better access to conference calls and presentations in a number of ways:

1) They get to ask the questions. Most calls are provided in listen-only mode. Only invited analysts and portfolio managers are typically allowed to ask questions, and even then companies practice some level of screening. An antogonistic analyst (should there be any other kind?) isn't likely to have their questions taken early on, if at all. But at least they have an opportunity to ask management a question; average investors have no such priviledge. I'm not suggesting for minute that companies open their lines to all and sundry. But it would send a good message if there was a period at the end of the call where companies took questions from investors that have been submitted by email. It would also be good if everyone on the live webcast could see what questions had been submitted.

2) They get to hear the answers. In most earnings calls, companies commonly include the question and answer session in the recording that is posted online for those unable to attend the live event. However, the same is not true of broker presentations. These are controlled by the host broker and usually only include the formal, prepared remarks by the company representative. The Q&A is commonly excluded from the replay. This denies those who could not attend the live event in person or online the opportunity to hear what is often the best part of the presentation.

3.) If they miss an event, they can get a transcript. This is perhaps the biggest inequality of all because it creates a de facto lack of access for retail investors. Anyone who has tried to listen to a conference call after the fact knows how painful the experience can be and will understand why so few investors bother. Because you can't search audio files or print them out for offline use, investors have to listen to the entire recording -- typically 60 minutes. The effort required is somewhat less if companies segment their calls into separate recordings of each speaker's presentation and one for the question period, but even this does not match the access institutional investors and analysts get through text transcripts.

Institutional investors get transcripts from companies themselves or via transcript services accessible through such services as First Call and Bloomberg. On the face of it, institutional investors' access to text transcripts seems inconsequential, but it creates an uneven playing field between those who have them and those who don't. Information is much more easily obtainable from text than from audio. Text is faster and easier to use, and speed of access to information is important to all investors, not just some.

As Eric Frank, executive vice president of Thomson Financial's Corporate Group, put it when announcing that the company would provide conference call transcripts to its subscribers, the new transcript services would allow institutional investors to "make superior investment decisions."

On the face of it insitutional investors' access to transcripts isn't a big deal, but it disadvantages other investors.

What does this mean for those who don't have access to text transcripts? Simply that they don't have the same opportunity to make better investment decisions. This is clearly not equal.

Preferential access to information for institutional investors doesn't end there. Many companies routinely conduct one-on-one meetings with key analysts and institutional investors. These are not made public.

Again, I am not suggesting that you take a video camera into every one-on-one and webcast it to the world (though it's not a bad idea), I am simply pointing out that some investors are treated better than others and this is an issue for companies' credibility and investor confidence in general. IROs must be more atune to these issues and find ways to use available technology to level the playing field more than they are currently doing.

Taking back ownership over your IR Website
To be quite honest, about half of all IR websites are a disgrace. If they were annual reports, no self-respecting IRO would allow them to go out in the mail. They'd burn the entire print run and start over. Why are they so bad? Mostly because IR departments don't actually manage their own sites. They leave it to vendors to do it for them, and these vendors don't care about investors, the company or the capital markets. With few exceptions, they do what is easiest and most profitable for themselves.

By handing off responsibility for their IR websites to vendors, many IROs are today technologically handicapped compared to their colleagues in corporate communications or marketing. This is an issue for the profession, and if companies continue to move towards integrated communications functions, IROs are going to come up short in the expertise department.

Nor can online user experience cannot be left to internal IT departments, web coders, programmers and engineers. It is a field where communicators of all stripes have the upper hand in terms of skill and experience, albeit that their expertise is drawn from other disciplines. Communicators must call the shots in terms of what they want their sites to do, and IT departments must find a way to make it happen.

Someone has to lead the charge for improved user experience and it might as well be the IR profession.

Among the communications disciplines, IR communicators generally have more to gain or lose from good user experience practices, and so they must demand a greater say over their companies' Web channel. For one thing, there are regulatory risks if companies fall short of good Web practices. And another thing is that investors and shareholders are often the heaviest users of corporate websites. They also typically are some of the company's most important stakeholders. An influential investor who holds a big chunk of your stock should not take a backseat to someone looking to dig up information for a college assignment or to download a free software update. Yet, this commonly happens because IROs don't argue their case forcefully enough inside their own companies.

So what to do? How do you go about improving the user experience of your site and getting more say-so over your company's website? Here are some suggestions:

1. Educate yourself. There are many good resources available online and in print to learn more about the factors that influence online user experience. Much of the content of IR Web Report covers issues central and specific to the user experience of investor relations sites. For a more general instruction in user experience, get a copy of Jakob Nielsen's book Designing Web Usability, The Practice of Simplicity. Add Usability.gov, a site set up by the US National Cancer Institute, to your bookmarks.

2. Engage other communicators. Being an advocate of good user experience requires gaining support from others involved in the company's web strategy. Information technology professionals are perhaps your easiest allies. While they might not know how to communicate with your audience, they certainly understand the importance of good usability. Indeed, technical people prefer working with communicators who want to make the systems they develop work even better for the end-user. It makes them look good. Communicators in other areas of the company are also key potential allies. Many may already be thinking about improving the online user experience of the sections they manage.

Anyone in business today should be skilled at writing for the web and know usability basics.

3. Test your site. Find out whether your site is hitting its mark for user experience. You can run surveys on your site, conduct focused usability tests with users, conduct regular user experience audits or get outside help from user experience consultants who specialize in specific types of online information, such as IR, media relations or e-commerce. The usefulness of these will vary, but the important thing is to put in place a defined user experience improvement program which requires you to formally measure and benchmark your performance every six months or so.

4. Write specifically for online readers. The biggest problem with IR websites, and all websites for that matter, is poor writing. Communicators are still writing as if their words will be read on paper when in fact they are almost always read on a computer screen. This is a significant problem because people read differently from a screen than they do from paper. In fact, they don't read, they scan. By learning how to write for online scanners, you will also improve your writing for print. Even the most skilled and experienced writers would benefit from an online writing course, or at least boning up on the basic techniques of online writing.

5. Demand more from service providers. Writing and providing online content in usable formats is an essential discipline today. Anyone in business, particularly those who provide expert agency services for a fee, should be skilled in writing for the web and have a basic knowledge of the rules of good online content. This includes all kinds of communicatins consultants, designers, wire services and website service providers. As with most things, it's up to the customer to ask for services which strengthen the user experience the company provides.

6. Industry associations must support their members. The UK-based IR Society deserves special credit for encouraging its members to take ownership of the Web. They are the driving force behind the annual IR Website Best Practice Awards, by far the best awards program of its kind in the world. The U.S. National Investor Relations Institute (NIRI) holds regular seminars and other educational forums on the topic. However, other IR associations could do much more than they are to educate their members about online IR issues.

7. Regulators should provide clear guidelines. Better online disclosure practices will lead to better informed investors, fewer bad decisions, and overall more efficient capital markets. Unfortunately, regulation will probably be required to get companies to take seriously the factors that cause barriers to access on the Internet, something akin to the SEC's Plain English rule, but in this case for Web usability and accessibility.

Although the SEC often is criticised for being behind the technology curve, it is actually way ahead of regulators in other countries. Canadian regulators are infamous for being technological dinosaurs and actually do things that are opposite to good practice, like providing an insider transaction database that does not support deep links to companies' filings. Go figure!

Much can and should be done by regulators to improve the usability of regulatory filings and to permit companies greater flexibility to use the Web without unecessary constraints. All regulatory databased should support HTML and XML, rather than only proprietary languages or PDF.

Regulators should be careful of vague regulations or being too prescriptive. Generally, it is better to establish a principle and offer examples. Some regulations designed to prevent bad practices by a few end up discouraging most companies from practices that are to the benefit of investors.