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 The Shareholder ForumTM`

Fair Investor Access

See related case examples of

Dell Inc.

appraisal rights for 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

For graphs of specific company voting for the past 5 years, see

Shareholder Support Rankings

 

 

 

 

 

Forum Report

 

Addressing Ultimate Investor Objectives

Fair Investor Access

Valuing Long Term Enterprise Success

Plans for the Shareholder Forum’s current public interest program addressing “Fair Investor Access” (www.shareholderforum.com/access) are being expanded to allow our attention to much more significant opportunities for communication improvements than originally contemplated. This scheduling extension will also allow us to develop another new program now, rather than next year, using the Forum’s traditional company-specific definition of decision-making issues to address the growing controversies about long term and short term investor interests.

Reports of both programs follow.

Fair Investor Access: an expanded R&D project

A few weeks into the practical details of the workshop project for “enhanced earnings calls,”[1] we realized that updating the process would provide both corporate managers and investors with very significant benefits. But as soon as we started exploring what solution providers could do to adopt the desired processes, we realized

(a)  most companies get the products and services needed for managing earnings calls from a solution provider that packages all the component products and services, which meant that our development of updated processes would require working with multiple levels of suppliers and integrators; and

(b) the largest provider of the relevant services, the Corporate Services division of Thomson Reuters, currently has a limited ability to provide leadership in any significant adaptations while its parent reviews strategic alternatives,[2] meaning that we must develop alternative coordinating resources.

While this project will clearly require a lot more work than initially expected, the extra effort is certainly justified by what can be accomplished. At the very least, we should be able to transform the earnings call process to match the effectiveness that companies expect in their communications with customers, employees and other key constituencies, and that investors experience in their communications with publishers and other intermediary information providers. And beyond this, we may be able to take advantage of the current combination of new process opportunities and shifting marketplace conditions to stimulate vigorous commercial competition for the full range of investor communications.

Extending the “Fair Investor Access” program’s schedule into the first quarter of 2013 should give us the time we need to fully explore and develop these extraordinary opportunities.

Valuing Long Term Enterprise Success: a golden goose analysis

Many Forum participants have become interested in the controversies about long term and short term investment views based on concerns about ultimate investor value realization and capital allocation,[3] including fundamental questions about “shareholder value” concepts.[4] The issues have also been presented in very practical terms by the recent popularity of activist campaigns that call for selling, splitting or otherwise liquidating corporate assets as an alternative to long term investment in an enterprise – the proverbial question of how to best realize the value of a golden goose.

This is the kind of investor interest that the Forum has traditionally addressed in a company-specific case analysis to define the relevant issues and information required for practical decisions, and I know that many of you will welcome our return to this type of program. What we need to get started is a good company example, and your suggestions of candidates will be appreciated. The company should be considered well managed as an enterprise, but presented with an activist challenge to consider alternatives for immediate value realization of all or parts of the company. Ideally, we would prefer an example in which the company actively supports the Forum’s independently moderated review of carefully defined issues to assure management’s understanding and effective response to investor interests.

Those of you who have participated in this kind of company-specific Forum program know that we can expect the process of thorough, rational review to result in a narrowing of the range of analyst valuations. We will therefore also want a candidate company that currently has relatively wide differences in investor value estimates, providing greater opportunity for Forum participants to benefit from the program.

Please let me know if you have any questions about this new program, or any thoughts to guide its development. The review of candidate companies must of course be conducted privately, but I will report the selection as soon as a decision has been made.

GL – October 25, 2012

Gary Lutin
Chairman, The Shareholder Forum
575 Madison Avenue, New York, New York 10022
Tel: 212-605-0335
Email: gl@shareholderforum.com


 

[2] See September 26, 2012 Deal Journal (The Wall Street Journal Digital Network): "Thomson Reuters Mulls Sale of Corporate Services Unit." It should be noted that Thomson Reuters was a sponsor of the July 2010 open meeting for the Shareholder Forum’s public interest program establishing standards for the use of electronic communications in shareholder meetings, providing its services to demonstrate the relevant processes; see July 16, 2010 E-Meetings Review, Focus Report: “Testing the Communication Tools.”

[3] See July 18, 2012 Forum Report: Winning Investor Support of Long-Term Corporate Success and its reference to the July 12, 2012 report on “Visionary Board Leadership – Stewardship for the Long Term” by a CFA Institute working group that included several Forum participants, including Margaret M. Foran, James Kristie and Jeffrey D. Morgan currently serving on the Forum’s Program Panel for Fair Investor Access.

 

 

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.