Why doesn’t everyone have an investor-friendly website?

It seems that when re-engineering one’s Investor Relations (IR) website there are three principle forces to finesse: perfection, practicality and technology.

Perfection

The idea of “perfection” is making the ultimate investor-friendly website, which we are happy to help you define. The goal is to make the current investors’ and potential investors’ information-seeking tasks as simple and efficient as possible. This means bringing information about a specific topic or event into one spot, even if it is derived from different types or sources of information. While it is also important to provide a good filing system based on information types (all Annual Reports in one place, all Quarterlies in one place, all speeches in one place, etc), it is investor-friendly to take an extra step and bring all comments or materials on an event or topic into one spot as well. Otherwise investors’ will go on an Easter Egg hunt to find everything to do with “x”.

If their due diligence pans out they’ll take a position in your stock; if it’s delayed, so is their purchase decision. If associated information points to bad news, well that’s proper transparency and prevents shocks to the share price later. Think of “perfection” purely from the shareholders’ point of view.

Practicality

The second force is practicality. The perfect site is more work for the IR crew, as the complete story about certain events or along certain topic lines must be updated using parts from various information types as they become available. A shoestring budget and an overworked IRO may struggle to absorb the extra work this entails ” especially in a traditional HTML site. Third party vendors may be asked to help by supplying programming assistance or by designing CMS tools that make the work less onerous.

It’s not hard to argue for the increased share value that may be realized by a more transparent story; a story that can be understood more quickly, that doesn’t require a research project to pull together. How much is the price of a car reduced by a closed hood or absence of records? A website that is merely a pamphlet stand of reports is not serving its web audience well, and is surely losing potential investors who don’t have time to put the pieces of the story puzzle together when there is no effort put into the telling. How much movement towards a full valuation will cause the diversion of a more appropriate budget?

Besides issues of manpower or budget, there are also corporate personalities who simply do not like to share information so freely. “Perfection” is definitely compromised by that lawyerly fear of making a mistake, or being caught in a mistake. We fight the fear and do the best we can.

Technology

The third force, which may turn out to be a force of good or evil, is technology. As we are exposed to it, we’d say it’s a force of good in our hands. For example, when we’re hosting a site ” and have full power over what can occur ” we see it as a positive force. But when the technology is in the hands of an uncooperative or time-stressed IT department, who slow down any sort of real progress, and sometimes even basic updates, it can be very negative. At other times, we are working with a cooperative and helpful IT group, for whom we build features for the IR area that IT has no desire or time to do themselves.

There is also the technology provided by third party microsite developers, which is often a step-up from dealing with an uncooperative IT group. However this again puts limits on what is offered and stops short of the investor-friendly perfection we seek to create.

When technology is wielded properly, it automates aspects of maintenance, decreasing the strain on a company’s IR crew, and allows movement towards an investor-friendly site.

Each situation is unique

Whatever your case ” how you define your ideal investor site, how generous your company’s resources are towards creating it, what the peculiar technological environment you find yourself in ” the main idea remains: a little work on our end towards investor-friendliness will save scores of investors wasted time and move them along towards a good decision and, perhaps, a position in your stock.