Investor Relations Society - IR Best Practice - Web guidelines

Website content should be clear, unambiguous, timely and relevant to the needs of existing and potential investors, both private and institutional.

Improving a shareholder’s knowledge and understanding of a company and the marketplace in which it operates is the best way to ensure that their expectations are realistic and achievable. A website that merely restates information that can be found elsewhere does not help achieve this important objective.

Financial data

Clear and comprehensive financial information is an essential component of any site. One of the main reasons investors visit company websites is to access reliable, up-to-date financial information quickly and easily. Key points to consider include:

Do not hide important financial information in financial reports. Provide financial highlights and summaries and ensure all financial information is presented in a way that makes it easy to understand
Show clearly which financial information has been audited and which has not
Make the annual report and preliminary, interim and quarterly statements available on the website. The section of the annual report covered by the auditor’s opinion should be clearly designated and additional information not contained in the annual report should be presented in a way that does not lead users to think it is part of the annual report
Include a clearly labelled archive of annual reports, which should be supplemented with all relevant shareholder circulars that were sent out with the main document such as the notice of AGM
Companies with listings in markets outside the UK should include relevant shareholder documentation on their site (e.g. 20-Fs if listed in the US), as well as information relating to the secondary listing (e.g. details of a Depositary Receipt programme if relevant)
Make key financial ratios available. These include Return on Capital Employed (ROCE) or Return on Net Assets (RONA), Total Shareholder Return (TSR), Cash Flow Per Share, Discounted Cash Flow Per Share, Earnings Per Share (EPS), updated Price/Earnings (PE) ratios and margin information. Any other financial ratios that may be pertinent to a company’s sector should also be included
Include gearing and credit ratings where applicable (see the Bondholders section for more information)
Make archived financial data going back a minimum of three years easily accessible. Where possible five- to ten-year histories of key data should be available such as revenue, operating profit, pre and post tax profit, earnings before interest taxation, depreciation and amortisation (EBITDA) and dividend payments
Include relevant information on the company’s main intangibles, including those not shown on the balance sheet such as brand and human capital (see the Corporate Responsibility section for more details on intangibles)
Consider providing an online calculator to enable shareholders to assess the value of their shareholdings over time
Include dividend and capital history, including stock splits
Make current financial presentations available both as webcasts and as retained data in the form of slides with notes attached. Allow all users access to the Q&A sections of these presentations
Make financial data – including the share price history – downloadable in a spreadsheet format where possible
As the trend towards greater narrative reporting progresses, key performance indicators are becoming increasingly important. This includes both financial and non financial information. These indicators need to be clearly explained and communicated

Relevant news

Keeping investors up to date with news about the company, its strategy and operating environment is a key element of a good corporate website. To do this:

Provide a constantly updated source of relevant news material on all aspects of the company and its operating environment
Provide a central point of access to all news releases about the company with each release clearly dated
Ensure that all presentations, speeches, reports and articles written by key executives as well as corporate brochures and newsletters are available and clearly accessible on the website
Archive webcasts for investors to access after the event
Provide links to relevant industry bodies, regulators and other appropriate organisations
Provide access to electronic filings. An example would be companies that file to the US Securities & Exchange Commission using the EDGAR system
Be open about bad news. Post it onto the site in the same way as good news. Companies are more likely to gain investors trust if they are open, honest and transparent about the good and the bad

Investment case

Provide users with a clear statement of strategy and vision from the company. Useful information that will help investors understand your company and its investment case includes:

A corporate profile detailing the history of the company, what it does, the products/services it supplies, its geographical reach and the sector in which it operates
Analysis of the company’s principal markets and future trends as appropriate
Information on current sector challenges
Relevant competitor information including market shares, market-led barriers to entry and proprietary key technologies or brands.

Shareholder information

A corporate website should provide an up-to-date source of shareholder information and should include some or all of the following:

High level shareholder analysis by size of holding, type of holding and geographic origin, including identification of key shareholders, as a minimum in accordance with the Annual Report and Accounts disclosure
Details of the company’s AGM (and any EGMs), including the total votes cast for and against each resolution plus abstentions. The site should also include the reasons for any resignations by executive directors, non-executive directors or the company secretary
Specific requirements for website disclosures around general meetings are contained in the Companies Act Sections 311A and 341
Webcasts, presentations and transcripts from the AGM
Facilities or information enabling electronic shareholder communications, including electronic submission of proxy forms and online share register facilities
Where online management of shareholding is not available, information forms should be available for investors to download, complete and send to the registrar. Such forms could include change of address notification, stock transfer, etc
A link to the registrar
Information on any special investment arrangements relevant to the company such as dividend reinvestment plans, direct dealing facilities and Individual Savings Accounts
Lists of company advisers and their contact details, including brokers, financial public relations companies, auditors, registrars and investor relations consultants
Contact details, including an email address and telephone number for the investor relations officer or team responsible for shareholder communication
A financial calendar of important events, including dividend, record and payment dates; results announcements; ‘quiet’ periods; investor days and other meetings of potential interest to investors and shareholders. It is often helpful if these calendars include links to related information once it has been published
Share price information, including current price, 12-month range, historic share price graphs with the ability to plot against comparators such as peer group companies, indices or sectors., share trading volumes and dividend history. Consider including a Total Shareholder Return charting option, adding dividends paid to the analysis for a more accurate measure of comparative performance.
A regularly updated Frequently Asked Questions (FAQs) section for private investors that deals with common questions about managing shareholding such as dividend payments, AGM dates, registrars and sales and purchase of shares. More general investor questions should also be addressed, which may include financial information, employee numbers, countries of operation and outline of strategy. An indexed archive of FAQs may be useful where the Q&As, although no longer timely, remain relevant
Clear identification of stock symbols and trading codes
A glossary of terms to cover both standard and industry-specific financial information
A complete list of analysts covering the company’s stock, including the name of the broker and their employer. This should be regularly updated to ensure that the list is comprehensive and accurate. Consensus figures for analyst forecasts can also be of interest – this should be time dated and accompanied by approved disclaimers
Details of the stock exchanges (including links to them) on which the company is listed, including cross-references to publicly available information held by regulators such as the US Securities & Exchange Commission

Bondholder information

Credit analysts and bond investors will require much of the same information as equity shareholders (profitability, cash flows, asset ratios, etc) but also have a slightly different set of requirements. The financial crisis has brought close scrutiny on the capital structure and debt exposure of listed companies, making it more important than ever for companies to make this information easy to find on the website. Where applicable, companies should provide clear information on their corporate debt situation. The following areas should be covered:

Outstanding bond and note issuance with maturities, coupons, security ranking (subordinated, etc), redemption profiles and other terms and conditions
Credit ratings (e.g. from S&P, Moody’s, Fitch)
Interest cover and gearing ratios
Details of operating and finance leases, pension liabilities and residual values
Terms of relevant banking covenants
Debt presentations and webcasts
Contact details (usually the Treasury department)

Corporate governance

The investor section of the corporate website is the natural home for information about how a company is managed on behalf of its shareholders and this information should be given due prominence. It is no longer sufficient to simply refer visitors to relevant parts of the annual report.

The rapid growth in socially responsible investing and concern over corporate responsibility issues requires companies to detail their policy in these areas and how they are managing performance (see the corporate responsibility section for more information).

Corporate governance should be in the main navigation of the investor section and should contain the following elements:

A statement about compliance with the Combined Code, giving a full explanation for any failures to comply and an account of how the code is employed
A list of all directors stating whether they are an executive director, an independent non-executive director or a non-independent non-executive director. Companies should also identify the senior independent director and provide details of the committees the directors sit on and/or chair (nomination, remuneration, audit, CSR, etc)
Biographical details of all directors giving their age, date of appointment and other directorships/appointments
A remuneration report disclosing relevant terms of service contracts, policy on new appointments, all elements of the remuneration package and the link between remuneration policy/corporate strategy and the creation of shareholder value. This section should also include details of directors’ interests in the company, share transactions and any related-party interests
The terms and conditions of appointment of non-executive directors
The terms of reference of the nomination, remuneration and audit committees, explaining their role and the authority delegated to them by the board
How performance evaluation of the board, its committees and its individual directors has been conducted
A note on pending litigation other than that related to normal course of business
An account of the company’s internal control mechanisms and risk management systems
Details of any key policies, relating for example to ‘whistle blowing’ and conflicts of interest

Corporate responsibility (CR)

A best practice corporate website should contain comprehensive information about the company’s CR policies and CR data and include a detailed review of how the relevant policies are linked to environmental and social performance management, health and safety issues and the management of relevant risks across the company. A best practice CR section should include:

A summary of internal arrangements for implementing CR policies, including corporate communications programmes
A statement of company policy (as relevant to the company/sector) covering areas such as energy consumption, employment, recycling waste, carbon emissions, water consumption, human rights, product responsibility and bribery and corruption
The policy objectives for each area supplemented by quantified progress towards the objectives noted, as well as details of the management systems put in place
A note on any pending litigation on health and safety or any other SRI matter
CR guidelines and approach, where they exist. It is also desirable to reveal if any of the reporting guidelines have not been followed in full together with the reasons for the omission
Details of the scope and membership of the corporate responsibility committee reporting to the board

Other additions to consider

Companies may consider adding the following to their websites:

Capital Gains Tax information
Tax information concerning current mergers/acquisitions
Information on disposals and acquisitions
Multiple language reports and site access
Provision of financial data in more than one currency
Online translation of webcasts

New technologies

Many corporate website users are web savvy and familiar with (and expect) the latest technologies and functionality. However it is important to focus on achieving sensible value for money and ensure that the less technically refined user is not alienated by overly complex functionality. Consider including the following innovative features:

Virtual visits to company facilities
A mobile version of the corporate website or investor section
Really Simple Syndication (RSS) feeds for users to receive the latest company news
Feedback forms, blogs and other forums to encourage interaction
Podcasts of events that users can easily download as audio files to their desktop or MP3 players
Content personalisation gives users the ability to create tailored pages, move content elements around, create their own menu structure or add electronic notes to pages. Settings are remembered for their next visit and companies can tailor communications to audience segments dependent on the types of choices they make
Consider the opportunities social media provides to corporate communications. For example, a Twitter feed can be a good way to promote company news. Companies that create social media channels should ensure they have a clear strategy and communications plan to provide guidance internally. Some companies will decide not to engage with social media but should at the very last monitor social media channels such as Twitter and Facebook to keep track of what people are saying about them online

Feedback

One of the advantages of working online is the ability to measure performance and use feedback to make improvements in subsequent reports. Companies can measure success in two main ways:

Provide users with a feedback option. Monitor the feedback and take appropriate steps where necessary
Use web analytics software to see how users navigate the website and which areas and pages are most popular

The IR Society would like to thank Rebecca Ford of The Group for her assistance in the preparation of these guidelines.

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