Corporate Eye

What Makes for Effective Investor Relations Sites? Part 29: History Provides Context

Although sometimes not within the investor relations area of a company’s website, a section on the company’s history can help investors understand the company better by providing insights into a company’s culture and past. Many large capitalization companies have been around for quite a few years, and as a result, have gone through a number of permutations, either with respect to the products they offer, the markets they serve or as a result of mergers and acquisitions.

Take, for example Rolls-Royce. The image that immediately comes to mind when the name is mentioned is that of a luxury automobile. Yet the company has not produced automobiles in quite a long time. This is where their company website proves quite helpful in understanding how they got to be a producer of engines and power systems, by providing a history timeline that goes back over 100 years. This allows you to step through in chronological order and understand when Rolls-Royce entered and exited major portions of their businesses. Doing so lets you start to understand the company and its emphasis on engineering better.

Rolls-Royce timeline

Another good example of a company that provides background to help people understand its long history is Imperial Tobacco. Although the modern predecessor of the current company was founded in 1901, the roots of the business go all the way back to 1786. Much has occurred since then, and the company provides a section on its history that gives you an appreciation of how it came into being.

Imperial Tobacco history

I would be the first to admit that this type of information resides in the “nice to have” category rather than being absolutely critical to making a decision as an investor, however, culture and context are important in how companies operate. The more companies can provide investors with such insights into the company, the better investors can make informed decisions.

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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.