Transcript: Annual General Meetings Key element in developing trust between shareholders and companies. Directors should retire on reaching the age of 70 Good gender balance represented on the board Corporate Governance Investors Relations Tools WEBSITE: MULTI MEDIA Best Practices IR Key Task of IR practitioner Communicate openly & regularly to shareholders during a major crisis & it can be a significant mitigating factor in protecting a company’s reputation. Includes the Chief Executive, Chairman and other key Board members being highly visible during the crisis Is at the heart of best practice investor relations. Face to face communications with individual shareholders, the principal forum for bringing directors to account in a public environment where all shareholders have the opportunity to participate Risk Management Measuring IR Success… Transparency & Disclosure IR in the baordroom More ‘boiler plate’ (standard formulations )and must aim to provide more than a basic level of compliance. Valuable opportunity to engage with stakeholders Use of audio or video cast for presentations, meetings, and press conferences Speeches and biographies of the board Video fragments, corporate films Image library Interaction b/w IR & FPR Annual Result, Earning Forecasts and announcements, Dividends Clear statement of strategy Business Opportunities/Proposed Investment A review of achievement of strategic Objectives; Explanation of market share and competitive environment Identification of growth opportunities Identification Key risks (External or Internal) how the management have addressed them in order to minimize their impact on performance What to Communicate? Electronic Shareholder Communications Shareholder Feedback Index Communicate effectively with their shareholders if they can reach them directly through transparent identification Keeping a check on the way in which the shareholder register changes over time Assessing any improvement in understanding of the company’s story within the financial community Analyzing the ease with which capital is raised, some refer to this as the “litmus test” for IR success Annual General Meeting Individual Briefings Press Coverage: Financial Press Conferences The Annual Report: available in print, CD rom, most would publish it on website. Many hold interactive conferences to explain results Internet: It is very important that an organization’s website have investors’ relation sectors. Internet can be another way of carrying out investor-relations activities while implementing the latest technology Effective way of communicating with shareholders in the digital era, however , it should not be seen as a replacement for direct communications. Crisis Management Need to be open about potential business risks. IR departments have a role in ensuring these risks are effectively communicated and explained to shareholders Should be fully integrated into company’s strategy & should cover issues which are relevant to the company A key function of IR is to act as a two way conduit between the company Board and the markets Uniqueness of the company’s offering The wider economy The management team’s track record The relative attraction of other investments Help a company to enter the stock market (convince people that the company will be a good investment and encourage investors to buy the shares) Communicate annual and interim results, justifying and explaining the company’s performance. Manage expectations about the company’s performance, (no shocks when the results are published). Communicate what the company is up to. Mergers and Acquisitions: To defend an unwanted takeover. To promote a company’s takeover bid for another business E.g. Marks and Spencer and Phillip Green? Word Cloud Companies should communicate in an integrated way, message has to be consistent across various media channels. What a shareholder reads in the newspapers is the same as that which he or she heard in person in a one on one meeting Accounting and Reporting Benefits of successful IR programs Measuring IR success Best practices IR Key task of IR Practitioner Communication & Its Importance Investors Relations Tools A reasonable level of liquidity in its shares Easier and cheaper to access to capital in the future A fair market valuation for the company A strong and dedicated group of supporters and believers Benefits of a successful IR Programs: Companies should seek formal feedback from shareholders at least once a year. The feedback should be provided to company non-executive directors and included in board packs as a matter of course Ready access to the board & should be at the heart of the corporate decision making process. A key function of IR is to act as a two way conduit between the company Board and the markets Shareholder Indentification Corporate Social Responsibility Factors not to be overlooked
Transcript: Website of a very influential french organization that is often described as one of a kind. A very professional and clear website. Strong and active presence on social networks. The survey's Analysis maybe diversifying activities and trying to also have actions directed towards consumers and not only professionals. Sustainablevisit's website could totally use a make-over. Be up to date when it comes to the use of new technologies. Stronger presence on social networks (Facebook, Twitter, Instagram) Taking part in international forums and gatherings to communicate its activities to a wider public. Threats: Social and environmental principles. Influent and known partners (The Global Sustainable Tourism Partner, Trip Advisor, etc). Presence on social networks although it needs improvements. The estimate company's value in 2019 is: 2.4*5.6=13,44M ATD, Acteur du Tourisme Durable The website is only available in French. ATD do not operate on an international level. Recommendations Disadvantages Crowd-funding strengths: Advantages Stricter operationnal processes. Shareholder comprensation requirements. The survey's results Investor relations Group project : Salaheddine Soumir Salim Boubakri Youcef Ouisti Dimitri Nyscoclone A comparison between SV and ATD The website's structure isn't clear enough SV.com is only available in English A weak social network presence and communication Opportunities: Lack of notoriety on social networks at the moment. Development of applications An Ecotourism market in expansion ATD is an organization created in 2001. It gathers a panel of French journalists that reinforce and support Ecotourism professionals. ATD's responsibilities include informing, organizing training sessions in sustainable tourism and networking. Tourisme-Durable.org is ATD's website. Weaknesses: A growing Ecotourism market. The rising interest for Eco-friendly travel solutions. SV still has some improvements to do which are going to be possible with the inflowing capital thanks to the IPO. The Ecotourism Market is very promising and people are very interested in it. Therefore, it's time we had a groundbreaking actor that would take the industry by storm and revolutionize the Ecotourism Market. Facing the growing demand for Ecotourism. Dealing with a growing competition. SV's business Model Crowdfunder.com is offers affordable services. Company valuation in 2014: $ 456 000 USD. Funding goal: $ 300 000 USD. Open date : 01/12/2015 Closing date: 01/12/2016 Share price : $ 25 USD Different share classes with different voting rights: no voting rights or restricted rights (e.g. can only vote in certain circumstances) or additional voting rights (e.g. 2 votes per share). A totally outdated website design ! S corporation : Seperate the entity from the owner Sustainablevisit.com is a start up website that allows people to make sustainable travel choices that range from restaurants or accommodation to museums and guided tours, etc. Sustainablevisit.com caters to future generations by standing by its social and environmental principles. SV.com relies on research and crowdsourcing to obtain the needed content and resources. strengths: SWOT ANALYSIS OF Tourisme-durable.org Recommendations Lack of consolidated, practical and worldwide information on sustainable travel. Growing interest of travelers for Ecotourism. Weaknesses: Making the website available in different languages. Capital Structure Our Crowd-funding structure of choice is Crowdfunder.com Financial Projection Operating on a more international level. About us Conclusion Tax savings Business Expense Tax credit Independent life Positioned on the Ecotourism market. Green database that classifies the offers (Hotels, restaurants, etc.) by how eco-friendly they are. SV gets a pay-per-click commission every time a website user clicks on a hotel or a restaurants, etc. Tourisme Durable is french only, we are global. It is addressed to professionals and their missions are different. Our site is more networking and deals with real places, whereas Tourisme-Durable works mainly with professionals and offers a different kind of services. They are an organization and not a web portal for non-professional users. They are a non-profit organization, we are a commercial company earning money. Our team is more proficient. We have a better understanding of investor’s expectations and are more flexible with that. Our corporate culture is more investor-friendly We have more international partners and are ready to engage them to extract synergies SWOT ANALYSIS OF SV Threats: Opportunities: People seem to be informed and aware of Ecotourism and the idea appeals a lot to them. They are even ready to pay between 300 and 500 euros for an eco-friendly vacation. Though the websites offering sustainable travel solutions are not that popular or known, people's interest in green tourism should not be underestimated. That proves that the market is very promising and appeals a lot to the young it's
Transcript: Washinton Post May 2007 Dawn Wolfe, a social-research analyst at Boston Common Asset Management, which holds Aflac in its portfolio, sent a say-on-pay proposal for inclusion on Aflac's proxy statement. She expected months of opposition, she said, but the company quickly saw the light and compromised. What happened? "We were shocked" when the proposal was filed, Aflac's Dan Amos told me. "Our initial reaction was, 'What have we done wrong?' " Amos said he called some of Aflac's biggest shareholders, who told him that say on pay seemed reasonable. "I realized it was something people wanted," Amos said, "so I went to the board and said we ought to do it. And so we did." Announce the vote scheduled for 2009 - Feb 2007 USA Today Move vote to 2008 - Nov 2007 Results of vote - May 2008 Announce CEO decision to decline $13 mil bonus - Nov 2008 Position Aflac as thought leader on exec compensation June 2009 Schedule CEO media tour Pitch story and offer CEO interview to reporters that have interest in corporate governance Target regional media initially to test effectiveness of messages before approaching national business media Heavily research issue to arm CEO with talking points 97% of shareholders voted to affirm stakeholder compensation in 2009, up 6% from 2008 Moved from #7 in 2008 to #1 in Fortunes 2009 list of World's Most Admired Companies in Health and Life Insurance Recognized as one of World's Most Ethical Companies and Most Respected Companies in Global Insurance Industry 2009 Corporate Responsibility Magazine named Aflac to list of 100 Best Corporate Citizens. Investor Relations http://www.nytimes.com/video/business/1194817099900/aflac-chief-discusses-say-on-pay.html Results Do you think an initiative like this would have been as successful if they weren't the first company to do it? Do you think they should have had more clear impact objectives? What other research should they have done? Execution Highlights Discussion Questions Daniel Amos CEO 1990 2006 "Say on Pay" First public company to conduct vote on executive compensaion Transparency and loyalty to shareholders "inquiries from a shareholder right's advocacy group" Research Features in Washington Post, Boston Globe, The Wall Street Journal, NYT, Newsweek and Time 10 minutes on Nightline 4 minutes on CBS Evening News 4 minutes on Today Show CNN ,CNBC, Fox Business News, PBS Feb 2007-2010 236 media items including print, TV, radio, and online coverage Circulation/audience/viewers: 413,371,900 Ad value: $4,465,620 Media value (ad value x credibility multiple 2.5) $11,164,050 "Say on Pay" 2007 Corporate Board Effectiveness Survey 1 in 3 directors of U.S. based public companies said CEO pay is "too high in most cases." 90% doubt the rules designed to give investors better and timelier information about executive pay are meeting investor needs. 2008 Report on Directors' and Investors' Views on Executive Pay and Corporate Governance 63% of directors think that the pay system is improving, compared to 36% of investors Background Target media with various story angles throughout the year List coverage they received and how their story progressed Execution Evaluation Planning Output Objectives Target national and regional business media, print, and broadcast Negotiate exclusive national release of news of the history-making announcement of "Say on Pay" in Feb. 2007 to help improve placement and prominence. Reiterate story throughout the year leading up to shareholder vote. Negotiate unprecedented access to CEO for select national media. Make CEO available for in-person interviews Leverage adjacent news trends/events to tell story. Used only secondary research Media Highlights
Transcript: "You can never over-communicate. There is no such thing" 5. Increase the number of long-term investors Share price before on July 30th: $32.34 1. Position the company to compete effectively for investors 7. Comply with legal reporting requirements 3. Ensure that expectations of the company's stock price are appropriate Henry Silverman, CEO of Cendant 2004 CREATIVE involve digital technologies to deliver corporate identity in novel After on August 6th: $29.78 average Institutional Banks Pension funds Insurance companies Hedge funds etc Institutions can be broken down into groups based on portfolio turnover (high, medium, low) investment styles (growth value, risk, income) Budget Before on January 14th: $348.48 Brand's influence on the share price ______ Legal Reporting Requirements Form 8A Annual report (Form 10K) Quarterly Report (Form 10K) Current Reports (Form 8K) Proxy statement _____ - D. Botha, M.Chaka, Public relations: Fresh Perspectives, Pearson Prentice Hall, 2007, p. 205 et seq. - Alexander Laskin, Managing Investor relations: strategies for effective communication, business expert press, 2010, p.19-27 - Franz Rudolf Esch, Torsten Tomczak, Corporate Brand Management: marken als Anker strategischer Führung von Unternehmen, Springer Gabler Verlag, 3. edition, p. 371 et seq. - Paul A. Argentini, Corporate Communication, Mc Graw Hill, 6. edition, 195 et seq. - Stuart Roper, Chris Fill, Corporate Reputation: Brand and Communication, Pearson Publishing House, p. 104 et seq. - Werner Pepels: Marketing Kommunikation, 2011, 2nd edition, p.375 et seq. - http://www.cityam.com/226445/german-investor-sentiment-hit-by-vw-scandal-and-declining-emerging-markets - http://www.wuv.de/marketing/wie_vw_das_vertrauen_der_investoren_zurueckgewinnen_kann - http://www.inc.com/encyclopedia/investor-relations-and-reporting.html - http://www.theatlantic.com/magazine/archive/2009/06/do-ceos-matter/307437/ - http://www.bloomberg.com/quote/VOW:GR = 3.8 billion of the company’s market value Strategies small companies Jobs gave a keynote during Apple’s Worldwide Developers Conference. His dull appearance set the web abuzz with rumors of his failing health. Conception Institutional Investors Sources Positioning Investors Source http://www.bloomberg.com/quote/VOW:GR source: http://www.investor.bayer.de/en/overview/ Developing a message Objectives Structure After: by January 20th: $78.20 by Sarah Duft & Nicole Scherer ___ Source: https://geschaeftsbericht.deutsche bank.de/2015/q2/serviceseiten/willkommen.html „A strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company’s securities achieving fair valuations“ The Media 2006 Analyze Deutsche Bank 2009 The Steve Jobs Discount 6. Understand shareholders rate of return size IR objectives Analysts Werner Pepels: Marketing Kommunikation, 2011, 2nd edition, page 375 Definition 4. Reduce stock price volatility Traditionally: Just the numbers Today: Financial and non-financial information ____ Investor Relations Before on January 14th: $85.33 Intermediaries fully outsourced “Every time he sneezes, shares of Apple catch a cold” (Collingwood,2009) Share price before on August 4th: $68.30 Jobs took a leave of absence for medical reasons without a specified amout of time: Jobs announced a 6-month leave of absence. Afterwards it was revealed that he had a liver transplant during this time. DEFINSIVE in times of crisis: timely provision of the correct information Individual National Investor Relations Institute (NIRI) weak brands After on August 9th: $63.59 Individual Investors source: https://www.youtube.com/user/GoogleIR The business world increasingly attracts print, TV, online media Media coverage can have a drastic effect on stock price strong brands report-writing, arranging analyst conferences, mergers and acquisitions, understanding Reg. FD _____ After on January 18th: $340.65 EXPANSIVE in periods of growth: activities to raise the profile and credibility of the organisation fully inhouse Media Why do they own stock in the company? How long do they own the stock? Where did they acquire it and under what conditions do they want to sell it? What other companies do they own stock in? How do they like to receive information from the company? What other sources of information do they rely on? The "Big Three" credit rating agencies: Moody's, S&P, and Fitch Ratings Similar to sell-side analysts but with a specific focus on creditworthiness Intermediaries act as influencers in the market Rating Agencies ______ Rating Agencies Instruments Generate detailed research reports that offer “buy” “sell” or “hold” recommendations Research is then provided to clients of investment banks such as JPMorgan and Chase or to retail brokerages Investors' values Steve Jobs has cancerous tumor
Transcript: IR is treated as a financial function rather than a communication. Roadshows,presentations and conferences are the most popular activities. Investor relationships practitioners today are facing "more responsible, fewer resources" situation. Changing environment and compliance with regulations is the biggest problem facing investor relations. IR is a strategic management responsibility that is capable of integrating finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company's securities achieving fair valuation. Q3: What educational backgrounds do investor relations officers have? 25% chart1 Q1: What specific departments manage the investor relations function? Q2: What are some of the investor relations' common activities? Q3: What educational backgrounds do investor relations officers have? Q4： What do investor relations practitioners consider to be the biggest problems facing investor relations today? Q2: What are some of the investor relations' common activities. 10% 4% Exploratory Research SONIA SUN 657604 The respondents were asked to rate on a scale from 1 to 4. How they were involved in various investor relations activities. The questions of the survey among the Fortune 500 companies 6% This exploratory research seeks to learn the present state of investor relations practices in the United States through the survey of investor relations officers at Fortune 500 organizations. most often 4 often 3 seldom 2 never 1 Q4： What do investor relations practitioners consider to be the biggest problems facing investor relations today? GOAL! chart2 Thanks! Conclusion 16% INVESTOR RELATIONS Definition ‘A DESCRIPTIVE ACCOUNT OF THE INVESTOR RELATIONS PROFESSION’ A National Study by Alexander V.Laskin 90% Thirty-eight respondents (60%) had a graduate education, with an MBA being the most often mentioned degree. Q1: What specific departments manage the investor relations function?
Transcript: Investor Relations According to the National Investor Relations Institute (NIRI), "Investor relations is defined as a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company and the financial community and other constituencies, which ultimately contributes to a company's securities achieving fair valuation". Is it really that important? Reports: annual, quarterly Income statement Balance sheet Cash flow statement Annual Meeting News releases "The Story" The Tools Basically, investor relations is a financial discipline and corporate communications function that meets the communications demands of all shareholders and constituents. Great -- but what does it actually do? A COM9620 Dicussion Using Investor Relations Three Key Objectives Questions? Thanks! YES! Investor relations has grown increasingly important over the past decade. The Great Recession eroded public confidence: corporate greed, risk taking, financial oversight, and excessive executive compensation Credibility is king: provide clear, full disclosure HOT Communication: Honest, Open, Transparent Combines financial and non-financial information Counsels management Provides market intelligence Monitors valuation Targets and cultivates investors Best Practice Investor Relations Functions: transparency in financial guidance comprehensive content responsiveness What is Investor Relations? 1. Explain the company's vision, strategy and potential to investors and "conduit constituencies" -- get the message out and understood 2. Ensure that expectations are appropriate for its earnings prospects, industry outlook and the economy 3. Reduce stock price volatility
Transcript: Companies should lay out information in detail. To stand a better chance of achieving a fair valuation in the market place, they should describe and quantify what they are doing, supported by financial metrics. a. Straight-forward strategy for growth b. Clear product and go-to-market messaging c. Strong and credible management team • Best IR programs in today’s environment must help investors and analysts understand a company’s earnings potential, and how the company plans to reach the potential. • Credibility – the most important aspect of any IR program a. Top-and bottom-line growth b. Segmental information c. Future growth > it describes the ways in which rights and responsibilities are shared between the various corporate participants, especially the management and the shareholders. 2. Increased Power of Institutional Investors 4. Manage Expectations • Arrange periodic group meetings with analysts and institutional investors. The presentation at this meeting should be brief and to the point. The investment community is concerned about philosophy as well as financial results. Seven Categories of Information Investors Requirement No two IR programs are going to be exactly the same because so much of this effort depends on the kind of company, its industry, size, and so on. Yet, over the last several years, some of the lessons that we have learned from applying basic communication strategy to this effort have helped the field become a more mature professional part of the corporation. 3. The idea is to systematically build an intelligence file, the starting point being the contacts you already have. This file can then be incorporated into a unique database which would be consistently updated. 1. IR must ensure that the stock price is appropriate for the earnings prospects, industry outlook, and the economy. 3. Company Dynamics Investor Relations 4. Support senior management in making strategic decisions based on valuable feedback from the investment community. 2. Form 10-K DEVELOPING AN INVESTOR RELATIONS FRAMEWORK • According to Thomas Garbett, the concept of investor relations as a separate business function started at General Electric over 40 years ago. Despite the increased power of institution and incomprehensible value of pension fund asset, experts see the investment trend moving away from equities as this decade progresses. The growth institutional assets, expands the market for equities, but the larger the asset bases become, the more likely it is that some institution will turn to passive management. These trends certainly put the burden on IR to find creative ways to market the company’s stock. a. Transparency of financial information and disclosure b. Availability and openness towards investment community c. Equal communications of good news and bad news d. Quantification of strategic objectives and goals 2. IR must limit stock price volatility. Perceptions of the Company + Cooperation of Senior Management = Objectives of IR Program What Investors want to Know > The level of performance of a business over a specified period of time, expressed in terms of overall profits and losses during that time. > It is the general prevailing attitude of investors as to anticipated price development in a market. This attitude is the accumulation of a variety of fundamental and technical factors, including price history, economic reports, seasonal factors, and national and world events. By the late 1960’s with the establishment of NIRI, the modern investor relations function began to emerge. Early 1970’s until the early 1980’s, IR purpose was to distribute basic financial publications to brokerage firms, securities analysts, and shareholders. The SEC became increasingly interested in what companies did and did not tell the investing public. IR professionals should analyze the mix of individual and institutional holders. Depending on the company, this mix may be worth changing. Data bases that are easily accessible are full of information on institutional stockholdings, turnover rates, and basic portfolio characteristics, which IR can use to identify those institutions that might be interested in the company’s stock. • From 1982-1987, the “bull market” forced the IR to change once again. IR’s role expanded with the growth of market participants and trading volume. • The stock market crash in October 1897 catapulted IR into the current stage. Investor Relations (IR) is a strategic management responsibility that is capable of integrating finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company's securities achieving fair valuation. The term describes the department of a company devoted to handling inquiries from shareholders and investors, as well as others who might be interested in a company's stock or financial stability. IR can target
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