Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

See related case examples of

Dell Inc.

investor rights to intrinsic value realization

and

Walgreen Co.

stock buyback policies

"Fair Access" Home Page

"Fair Access" Program Reference

For graphs of specific company and related industry returns, see

Returns on Corporate Capital

See also 2011-2019 analyses of

Shareholder Support Rankings

 

 

 

Forum distribution:

Professional views of processes for investor access to decision-making information

 

 

Source: The Harvard Law School Forum on Corporate Governance and Financial Regulation, February 19, 2019 posting

Communicating with the Investment Community in the Digital Age

Posted by Jonathan Doorley, Brunswick Group LLP, on Tuesday, February 19, 2019

Editor’s Note: Jonathan Doorley is partner at Brunswick Group LLP. This post is based on his Brunswick memorandum.

Having a sophisticated and current understanding of how the investment community gathers and processes information is critical for success when a corporate issuer is communicating with the market on an ongoing basis or during a complex situation such as a transaction or responding to a shareholder activist.

Brunswick has been tracking the digital consumption habits of institutional investors and sell-side analysts around the world for a decade, and the results of our latest study reveal important trends that should be considered when formulating both ongoing and event-driven investor engagement programs.

Data Collection Methodology

In the fourth quarter of 2018, Brunswick’s in-house research division (Brunswick Insights) surveyed 318 institutional investors (52%) and sell-side analysts (48%) on their use of digital and social media platforms in the investment research process. 40% of participants were located in the U.S., with the remaining located throughout Europe, the U.K., and Asia. In this report, “digital” refers to any information source, publisher or platform that lives solely online, and “social media platforms” refer to a subset of digital sources where users can consume, share and discuss information.

Highlights of Results

  • Use of digital research methods is now ubiquitous—According to our study, 98% of the investment community uses digital sources to investigate and conduct research during their investment process. 88% of participants told us that they make decisions based on information they learned online, marking a significant 18% increase from the 2017 results and a 41% increase from 2015.

  • Trust in digital platforms is accelerating—The investment community is placing increasing levels of trust in information that they’re sourcing online. Though not quite at the same level as the most top-tier financial media, trust levels for digital platforms now compare favorably to other traditional content publishers. For example, information from search engines is trusted on a similar footing with The New York Times, CNBC and CNN. And the top social networking platform, LinkedIn, is more trusted than MSNBC, TechCrunch and Politico. It’s no surprise then that 81% of participants rely upon information retrieved from Google during the research process and 63% of participants use LinkedIn for the same purpose.

  • CEOs are expected to be digitally engaged—The expectation for CEOs to engage with audiences via digital channels is intensifying. Half of participants told us that they now use digital channels to learn what CEOs are saying, a dramatic 21% increase over last year’s results. That increase is especially significant among sell-side analysts, 59% of whom now say that they use digital to stay connected with CEOs.

Key Recommendations for Corporate Issuers

  • Utilize all available channels at your disposal—Over the last decade, engaging with the investment community has evolved from a quarterly or annual exercise managed by the investor relations department to an ongoing strategic imperative that demands participation from senior management and independent directors. While nothing will replace the core tenants of a robust investor engagement program—roadshows, conference participation, AGMs, etc.—digital channels provide an opportunity for corporate issuers to communicate directly with investors and analysts on an ongoing basis as well as around times of significant change like an M&A transaction.

  • CEOs need to get in on the action—Executives who lack a strong, personal digital profile and content strategy are creating business risk. As a practical matter, building an effective individual digital profile is not just an essential component in a successful investor relations strategy, it is now a necessity for maintaining shareholder value and competing with peers that are more active in digital and social media. Concerns about Reg-FD issues and other SEC disclosure obligations are easily mitigated through careful planning alongside legal counsel.

  • Don’t leave anything to chance—With recent studies suggesting that corporate reputation is now directly responsible for up to half of market capitalization, a robust and thoughtful engagement strategy with the investment community—around results, off-cycle, or event-driven—is critical for both maintaining and enhancing shareholder value.

 

 

Harvard Law School Forum on Corporate Governance and Financial Regulation
All copyright and trademarks in content on this site are owned by their respective owners. Other content © 2019 The President and Fellows of Harvard College.

 

 

This Forum program is open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to access@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.