New NYSE.com Underscores Importance of Reviewing Third-Party Info

By Dominic Jones, IR Web Report

THE world's biggest stock market, the venerable New York Stock Exchange (NYSE), recently unveiled its redesigned website, giving listed companies greater prominence and more opportunities to attract potential investors to their websites.

Links to your site from stock exchange sites, investment portals and proprietary networks can draw tons of traffic. In the case of the NYSE, a link to your company's site is like free advertising to a very large potential audience.

IR departments should have a strategy and process for improving and maintaining their companies' information on third-party sites like nyse.com. They should also be regularly monitoring links to and from their sites to ensure they are valid.

Unfortunately, most companies don't manage their online profiles adequately. This has given us some interesting examples in our guidelines for managing inbound links and for preventing link rot on your website.

Now with the NYSE's new website, many companies listed there will suddenly find that the exchange is providing information about them which contains errors and broken links. Worse still, since the exchange does not attribute the information to any source, the impression is that listed companies themselves are providing the information.

While some companies have directed the NYSE to provide specific information, for many companies the NYSE is using the same company profile information that Reuters uses in its Reuters Fundamentals company database. This database was acquired by Reuters when it bought Multex in March 2003 for around US$220 million.

In our reviews for large companies, we often find errors which stem from vendors like Reuters, Thomson Financial and others. Problem is, this same information is used by many websites and information services, including the likes of FactSet, which provides data and information services to capital markets participants, and Yahoo! Finance, the most popular website for retail investors. So if there is wrong information or links in one of these databases, it will be spread to a large number of locations across the Web.

Although you can question the NYSE's wisdom in using Reuters' information without attribution, it is the listed companies themselves that must accept ultimate responsibility. It is their job to regularly review profile and other information on third-party sites and databases to ensure the information is up-to-date and accurate. This can be a time-consuming process, but it is essential if companies want to avoid situations where errors can undermine their credibility with investors.

For this article, I spent an hour reviewing the information nyse.com provides for 18 listed companies in the commodity chemicals subgroup. By chance, the subgroup includes six large-cap companies from our IR Web Report Global Rankings™ benchmarking survey, including Bayer, BASF, Dow Chemical, Dupont, NOVA and Sasol. In addition to these, there were eight U.S., two Chinese and two Brazilian companies in the group.

My objective was simply to demonstrate the issues that must be managed with such listings. Having done this type of review for many companies in the past, I had a sense that this activity would yield some interesting findings. But even I was surprised by what I eventually found.

Companies' profile information more prominent on new site
For NYSE-listed companies, the nyse.com redesign is good because it gives them greater prominence on the site, more so even than other stock exchange sites.

There is now a new tab on every page that leads to an improved listed company directory containing information on each listing. The directory is also better designed than on the old site. It's now much easier to sort companies by country and industry subgroup.

This makes it easy to locate a group of competitor companies in a few seconds, and it means that any errors or incomplete information on companies' profile pages is more noticeable than before.

 

Through a prominent tab on every page, users now have easy access to information on the exchange's listed companies.

On the face of it, the profile information for each listed company has also been improved. Whereas the old site provided a profile, two links and contact information, now there are up to eight links to different sections of companies' sites, as well as contact information and a brief profile.

However, the information the site provides for companies is not uniform. The biggest difference was in the contact information and links to each company's site. Here's how it broke down:

As I reviewed the pages, the differences in the information and links was striking. If, like investors, one assumes that companies are responsible for providing the information on the NYSE's site, then many companies looked unprofessional or even incompetent.

Of the 18 profile pages I inspected, only that of Brazil's Ultrapar Participacoes SA came close to being good. It was the only one to provide a name and a phone number for a company contact.

Personal contact information humanizes companies by making them seem more approachable and accountable. It makes a big difference for Ultrapar as it wins the award among its peers for approachability and apparent responsiveness to investors.

All of the other companies came across as impersonal and disinterested. Even though NOVA's page provided a mailing address, telephone and fax number, the lack of personalization still left the company looking bureaucratic and aloof.

Personal contact information makes Ultrapar appear more interested and accountable.

 

NOVA Chemicals' profile page was one of the most complete in the group, but the lack of a contact name makes the company appear unfriendly and disinterested.

 

Westlake Chemicals looks like it isn't paying attention to its online profile at all because there are no links for contact information.

Half had broken links or other errors
If there are errors or problems with a company's information on third-party sites, investors will place at least part of the blame on the company. They will perceive that the company is sloppy in managing its information. And if that happens, investors, journalists and others will have less confidence in the information they get from companies.

Broken links are perhaps the most common problem with company information on external sites. Because the Internet is constantly changing and pages are moved and removed, links often become invalid. This results in errors that, as we've seen in the past, can be embarrassing for companies.

During my visit to the new NYSE website, it didn't take long to find companies with broken links in the commodity chemicals subgroup. A "thermoplastics" company called Spartech Corporation provided just two links — one for an email address and one ostensibly to "Financial Information." However, when I clicked on the "Financial Information" link, I was taken to Adobe's Acrobat Reader download page.

When I clicked on the link to Spartech's financial information, I was taken to the Adobe Reader download page instead.

On BASF's profile page, when I clicked on a link to "Products/Services," I was taken to a page containing information on the firm's board of directors. On Bayer's page, several links to company background took me to pages telling me the information had moved and that I should update my bookmarks. On Dupont's page, a link to "Financial Information" led to the firm's archived filings on the SEC's Edgar site rather than to the company's main SEC filings page. And PolyOne provided a link to a page that had expired or been moved.

One link on PolyOne's NYSE profile page produced a "page not found" error.

Still others, like NL Industries and Wellman Inc., provided links to pages that had no navigation or indication of which site the page was on. This happened because the links where to framed-in pages hosted by vendors like Thomson/CCBN and Shareholder.com. It is astonishing that companies are still using crude framed-in content when vendors have offered better options for several years.

Linking from the NYSE to NL Industries' IR homepage produced this result, an unframed CCBN template page that has no navigation or company branding.

 

The same NL Industries page above, but this time with the site's masthead and navigation in a top frame. The crude, outdated structure of this site makes it impossible to link to individual IR pages because they're framed in. This company's site should have been upgraded a long time ago.

In all, more than half of the companies in this one subgroup had problems. I didn't test all the email links provided, but I did notice that Wellman Inc. still lists an email address for an IR contact who has long since left the company.

Saying the NYSE's listed company directory is a dog's breakfast is no exaggeration. I took a quick look at a few companies in other industries and quickly turned up similar issues. Some information seems to have been sourced from Reuters and some from listed firms themselves, and all of it is riddled with inconsistencies and broken links.

This is hardly what you would expect from the world's most prestigious stock exchange and its listed companies. And it begs the question that many investors likely will ask when they experience this mess: if the NYSE and its listed firms cannot be trusted to manage something a simple as a company directory, what else might be falling through the cracks?

See also:
> Managing inbound links
> Avoiding link rot on your website
> Investor relations contacts pages