It’s hard to know where the boundary of investor relations activities ends and that of corporate governance starts up. Many of the things each area is concerned with tend to overlap. It is the investors (shareholders) who vote upon management that runs the company and major decisions such as mergers and changes to a company’s charter documents. If for no other reason than good public relations, corporations wish to appear to be sensitive and responsive to shareholder concerns about how the company is governed.
Yet when you are in the trenches of day-to-day investor relations, it is hard to find analysts that get very concerned about corporate governance. The vast bulk of investor relations activities are concerned with what the company has recently done to impact earnings, cash flow and the balance sheet and what the company plans to do in the future to affect those items. Governance is almost never brought up by institutional analysts unless there is a major vote pending. Even then it is more likely that the company will initiate the conversation about governance, seeking to understand investors thinking on the subject so as to avoid the embarrassment of losing a vote.
What all this means in the context of investor relations web sites is that the information of governance should be readily at hand, but not necessarily cluttering up your main IR site where everyday information is the stock in trade. In the past ten years most companies have created separate governance sections on their websites, covering everything from the composition of the Board to Articles of Association. These sections can be quite extensive and it makes sense to have them in a separate section. But it also makes sense to make them easy for investors to find without wandering all over the main site in search of them. The best way to do this is simply to create a link on the investor relations home page (and other relevant pages within the IR section) back to the governance section.
Vodafone, the telecoms company, does a nice job of executing this strategy. When you first arrive at their investor relations section, scrolling over the top banner causes a drop down menu to appear, as shown below, giving the reader the opportunity to go to the governance section, if that is their need.
Clicking on the link brings investors to Vodafone’s extensive governance section, shown below, and saves them the hassle of trying to figure out whether Governance is listed under sections with different names such as “About Us” “The Company” or some obscure tab. It may be a small thing, but when an investor is interested in your governance issues is not the time you want to annoy them by making the information hard to find.
In this series:
Previous post: Annual General Meetings
Next post: Management
Lucy is Editor at Corporate Eye
