by Neil Hershberg, Senior Vice President, Global Media/Business Wire
They are known as IR “Best Practices” for a reason: collectively, these disclosure tools meet the information needs of all market participants simultaneously and in real-time, and they promote fair, orderly, and efficient capital markets.
The good news is that the National Investor Relations Institute, the prestigious international association of more than 3,300 IR professionals representing over 1,600 publicly held companies, released its 2012 survey on corporate disclosure practices last week. The overwhelming majority of respondents indicate that they will stick to tried and proven compliance platforms — SEC filings (91%), press releases via paid providers (89%), and publicly available conference calls/webcasts (67%) — as their primary tools to reach the investment community, and to satisfy their regulatory obligations. Interestingly, these statistics are unchanged since the last NIRI survey focusing on this issue in 2010.
The NIRI survey of 2,038 IR professionals bore a number of interesting findings, including:
- 88 percent of respondents indicate that their companies have no immediate plans to move towards exclusive use of their corporate website to disclosure material information. Nearly two-thirds said that their companies will never exclusively use their corporate website as the only method of material disclosure information.
- Social media platforms (e.g. Twitter, Facebook corporate apps) are slowly being embraced by IR professionals as part of their broader disclosure arsenal. However, no single option is used by 20 percent of the universe sample.
- The most important factor determining the method/channel of disclosure is the materiality of the information; cost ranks as the least important influence in the dissemination decision.
The major takeaway from the membership survey’s findings is that four years after the SEC published its controversial Interpretive Guidance Release on Web-Based Disclosure, the industry has responded with justified caution, and a genuine concern and commitment that the information needs of all of its investor constituencies are addressed.
There is a clear recognition that a broadly disseminated news release that is simultaneous and freely accessed on an equivalent basis by the investment universe is the surest way to providing a level playing field for all market participants.
It also is noteworthy that IR professionals are adopting supplementary tools to reach investors, augmenting the reach of proven disclosure channels. In the NIRI survey, respondents report using over 15 different channels for disclosing information.
The NIRI survey invited members to submit open-ended, qualitative responses. Here is a sampling of what NIRI members are saying:
- “…I am increasing the channels that I use to communicate and not relying on any one channel, certainly not my website which requires investors/analysts to be more pro-active to access..” (Small-cap, Other Services, Corporate, Global Brand)
- “Our goal is to reach as wide an audience as possible with information, not limit the audience to only those people who happen to visit our website at a particular time.” (Micro-cap, Manufacturing, Corporate, Global Brand)
- “In my opinion, the dissemination of important information should be as broad and simultaneous as practicable.”" (Micro-cap, Information, Corporate)
- “We don’t believe that our retail shareholder base has equal and timely access to our website for fair disclosure.” (Mid-cap, Finance and Insurance, Corporate)
Based on the NIRI survey findings, the IR community should be commended for its corporate responsibility, in addition to its excellent work serving the interests of investors.
In a world of diminished services and diluted values, it is especially reassuring to see the IR industry’s steadfast commitment to ‘Best Practices.”
Business Wire firmly believes that it is the best choice for disclosure services, which has been our core business for more than a half-century. We are the only service provider to have patented technology that provides simultaneous, real-time access to network recipients worldwide. Our network security and editorial processes are audited annually in multiple international jurisdictions by leading independent accounting/management firms. And we offer a full-suite of reporting services, all handled in-house, including EDGAR and SEDAR filings, as well as fulfilling disclosure requirements in 14 markets throughout North America and Europe.
We once again salute NIRI members for their unwavering commitment to preserving the ideal of fair and full disclosure, and for their support in maintaining the integrity of our financial markets.