Wednesday, August 18, 2010

Investor Relations - Changing Landscape, Changing Expectations

New technology, consumer expectation and a changing reporting environment are changing the world of investor relations.

Recently, the obligation of a company to communicate with its shareholders was mainly seen in annual and interim reports.

With the 2007 ‘opt out’ amendments to 1993’s Financial Reporting Act, companies no longer have to send stakeholders financial reports unless they are requested.

While some companies have embraced the chance to better manage print costs, others have started to completely rewrite the manner of company-stakeholder communication.
A new trend is seeing many choosing to go above and beyond compliance to build and strengthen relationships with their investors.

In addition to financial reports, online presence opens up a whole new range of instant communication techniques that have never been used before.

Recent changes to financial reporting standards have made financial statement disclosures more complex. Many organisations are responding to this increased complexity by publishing concise annual reports containing easily understood information and a minimum of financials. This short form report is supplemented by the more detailed, traditional annual report, available on request.

Stakeholders have unlimited access to current data, downloadable financials, reports and presentations as well as a 24/7 personalised access for a range of purposes such as online voting and giving feedback.

Due to the ‘I want it now’ nature of modern society, many news reporters and investors are increasingly expecting companies to supply up to the minute, clear and timely information. Several companies now combat this by encouraging subscriptions to weekly email reports and direct RSS feeds.

A compliance-plus attitude to investor relations not only makes the company attractive to potential investors, but also reinforces relationships with existing debt and equity investors. This has caused a major divide between the companies who address old demand and the ones who run the extra mile.

Success is now found in the interlinking of necessary information with its most effective medium so that different stakeholders have easy access to any information they require.

Overall, traditional methods of investor relations have been taken over by new ideas and methods. New technological opportunities along with the instantaneous expectations of modern society are causing many developments that are strengthening relationships and frequenting company-shareholder communication.

To keep above competitors, companies must now strive to communicate with their investors in new and creative ways.
Now, to experience the full potential of investor relations!