Corporate Eye

What Makes for Effective Investor Relations Sites? Part 15: Blogs

For the most part, corporate investor relations sites have stayed away from social media in all of its forms. There are a variety of reasons for this, ranging from overly protective attorneys to lack of resources, but at the very least I think that blogs should be considered as a way to make your IR site more effective and interesting. Twitter might be an application too far, but a blog is very much something that can be useful in telling the company’s story in plain English.

There are very few companies that have investor relations blogs. In fact, I know of only one: Dell. They use it for a variety of purposes, ranging from interviews to discussion of business lines and telling people what the IR department is up to. I’ve included a screenshot below.

Dell IR blog

When you think of the number of repetitive questions a typical investor relations officer answers in the course of a year, it would make sense for IR departments to write out the answers and post them on the blog. That way, rather than answering the same question for the thirtieth time while going brain dead, an investor relations officer can point people to the blog for the complete answer. Further, if you take the time to sit down and write out your answer, everyone will get the same information. My experience in this area is that in new situations, the quality of the answer an investor gets is principally the function of two factors: When they ask the question and the completeness of the questions they ask. If an analyst is too early in the question queue, many times the answer has not been fully formulated by the IR practitioner and valuable information may be left out. Secondly, if the analyst is not an astute enough questioner, valuable information may also be left out as many IR officers only answer the questions asked, figuring that it is not their job to school the analyst. The result is an inconsistent spread of information. The act of writing out the answer forces a more complete answer to be formulated.

Over the course of many years the amount of plain English text investors receive about their investments has steadily declined. In the U. S., most annual reports today are what are known as 10-K wraps, with no more than 12 pages of free form textual discussion about the company. Shareholder newsletters are few and far between and quarterly reports have disappeared entirely. Why not use the relatively costless printing press of the web to deliver more information about your company in a reader friendly format such as a blog?

In this series:
Previous post: Engaging the Individual Investor
Next post: Visibility

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John Palizza

John recently retired as a Lecturer in Management at Rice University’s Jones Graduate School of Management, where he taught investor relations. Prior to that, John was in charge of investor relations for Sysco Corporation and Walgreen Co. He holds a MBA from the Kellogg Graduate School of Management at Northwestern University and a law degree from Loyola University of Chicago. You can learn more about John’s thinking about investor relations at his blog, Investor Relations Musings.
 
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