This week I was invited to speak at the Australasian Investor Relations Association (AIRA) seminar in Wellington. It was encouraging to see many CEO’s and CFO’s of listed companies in attendance. Even better was that all 14 speakers were preaching from the same hymnbook – by and large the one written by the NZSA.
So what was the message we delivered? Firstly, ignore retail shareholders at your peril! For many companies they collectively represent the largest shareholder. Perhaps this is something GPG should have thought about?
Companies need to use a variety of approaches to reach retail shareholders and should not assume they are all unsophisticated. Avoid jargon and consider plain English shareholder reviews or updates to compliment the annual reports. The “more is more” communications style championed by Infratil and Abano is a good example of best practise that the NZSA applauds.
We are very much less impressed with the attitude of Goodman Fielder who has refused permission for the NZSA to have an information table at the venue of their AGM this year. Their logic is that this is a “shareholders” meeting. It seems to have escaped their notice that we are the NZ Shareholders Association. In fact, NZSA members will be there, both in their own right and as proxy holders for our members (and anyone else who wishes to utilise our service). This year we will also host members from the Australian Shareholders Association who generally hold a bunch of votes. Contrast this to Sky City who arranged facilities right beside the entry point to the meeting, or Rakon who set us up in the meeting room so as to maximise our exposure.
Good investor relations professionals should respond to investor enquiries promptly and with relevance. The days of having the office junior select from three stock responses belong in the ark. Companies also have a duty to institute new technologies where appropriate to reach investors and let
them access company presentations. It is depressing have to say it, but several speakers hammered the message to keep company websites up to date and intuitive to use.
Astonishingly, the shiny new, “all singing, all dancing” website from Michael Hill International requires users to download special software just to see it! Investors should be asking the company what motivated them to waste resources in this manner.
Getting this right is not about size or financial clout. The winner if this year’s BIWA award for best investor website was Pike River Coal. Nobody could accuse them of stellar results, but as I said recently “at least they are struggling in a clearly communicated way”.
Cynics would suggest that PR and investor relations are the same thing, but this is not the case at all. In fact there was a clear view that “spin”, economy with the truth, and misleading statistics were really dumb ways to deal with issues and would inevitably result in the company share price getting a kicking. This is particularly the case when there is bad news. Evidence was presented that retail shareholders are very loyal and forgiving to sound companies when they are dealt with honestly and upfront. Air New Zealand’s handling of the A320 crash was a clear case in point. Nuplex’s appalling stuff-up in regard to its bank covenant breach was certainly not. Both the company and investors paid a heavy price as a result.
Then there is the media. A common theme was that the “story” often gets in the way of the facts. Most organisations have slimmed down their business desk capabilities considerably over recent years. This has resulted in the few remaining reporters being under considerable pressure to pump out articles at an ever increasing rate. An old adage runs that you can have any two of speed, quality and price (sales), but not all three at once. Clearly on occasions “quality” is the fall guy. Perhaps it is time for APN and Fairfax investors to insist they deserve better?
The really encouraging thing for me was that repeatedly, speakers urged attendees to talk to the NZSA. There is increasing acceptance that we are the voice of the retail investor and have an important role to play ensuring appropriate checks and balances are in place. Do we make a difference? Of course we do! Just last week Auckland Airport significantly modified their proposed director’s fee increase following discussions with the NZSA.
The NZSA motto is “Many Investors, One Voice”. If you want your voice to be heard in a way that is proven to be capable of effecting change, then you need to join the NZSA. It will only cost you the tiny sum of $115 per year proving that while talk is not cheap, in this case it represents remarkable value!