Are investors ready for a Digital Future?

This is a guest blog post Thomas Toomse-Smith from the Financial Reporting Council. The Financial Reporting Council is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.


The internet and technology has revolutionised many aspects of communications; however, communications between companies and investors does not appear to have taken full advantage of this revolution.

In order to understand why this might be, and how reporting might evolve in the future the UK Financial Reporting Council’s Financial Reporting Lab (Lab) launched a project to look at digital reporting by companies. The Lab has issued its first report from this project. The report called Digital Present is based on analysis conducted by the Lab from in depth interviews with companies and investors. The interviews were supplemented with the results of an online survey of retail investors.

The report provides practical guidance to companies and highlights some areas where improvements could be made to what currently exists.

The importance of annual accounts

Annual reports remain of paramount importance to investors. However, investors prefer PDF for digital annual reports. They consider PDF not as a substitute for a hard copy, but as a progression from it. PDF provides the best mix of attributes of paper and digital annual report, but companies still could improve the PDF by thinking more about how to deliver the best experience with it on-screen.

Making sense of multi-channel

Alongside the annual report, companies use a range of other channels to communicate information Investors need to consume information on multiple companies in an efficient manner. However, company-produced tools, by their very nature, focus only on the individual company, and the multitude of channels leads to a significant proportion of them too failing to gain traction with investors.

Investors have specific feedback for companies on the most significant channels and tools:

  • Delivery of annual results presentations – Investors want multiple channels to be available (e.g. phone and webcast) preferably with supporting slides. Transcripts of the entire event, including all Q&As, is also deemed important.
  • Social media – Investors do not currently view social media as a useful channel for company produced, investor-focused information. It is seen as repetitive of other channels.
  • Investor relations videos – Many Investors are cynical about the use of video by companies. They consider them to be promotional in nature, and unfocused in aiming at many audiences. Those Investors that value them concentrate on nonverbal information such as body language.
  • Investor relations apps – Apps are not popular with investors. Many Investors find the need to have an IR app for each company prohibitive; they are concerned that this uses up space and adds clutter to their devices, especially when following multiple companies.

Investors who participated in this project suggest that companies:

  • Reduce duplication and focus development towards tools and channels which provide new or additional information.
  • Acknowledge that investors follow more than one company by making tools and channels more consistent in scope and operation with other companies, making them easy to access and locate.
  • Make the purpose of each channel or tool clear to investors, and clarify its contents.

Investors have shown they are open to innovation when it meets their needs to access information relevant to their analysis, across companies and time. To enhance current digital reporting methods and innovate further, it will be important for companies to build on the attributes of current reporting that investors identify as being most helpful.

The Lab will build on the findings from this stage of the project to inform remaining phases. In the second phase, ‘Digital Future’ the Lab will work with companies and investors to develop ideas of how companies could use digital reporting in future to improve their communication with the capital markets. Do you have views on this area? The Lab would be interested in hearing from ClosIR users. The Lab has released a survey alongside the Digital Present report seeking views from those involved in the production and use of corporate reporting. The survey will be open until the end of June and can be accessed here.

You can read the full Lab report here.

3 steps to make the most of your digital IR Strategy

There were many trends and topics covered during this year’s annual conference of the National Investor Relations Institute (NIRI) in June 2014 in Las Vegas. From social media to corporate access, there was significant interest from IROs on how to navigate the changing world of IR and the potential role that technology can play.

As the number of institutional investors with global mandates continues to expand, IR teams are presented with new opportunities to engage with new investors around the world.  However, the traditional means of discovering, accessing and engaging with thousands of new investors will not be sufficient to address this rapidly growing opportunity.

So how can IR teams use today’s digital tools to manage their workflow and ensure they are accessible to the increasingly growing investment community? We present 3 steps for you to consider.

1) The first step is to maintain a best practice digital presence of your company to investors. This process starts with understanding available tools and creating a digital IR toolkit, which may consist of a combination of the IR website, email distribution list, social media channels and potentially a mobile app. The digital strategy should also encompass monitoring your company’s presence on data platforms such as Thomson Reuters, Bloomberg or Yahoo! and Google Finance. The following six questions need to be considered;

  • Have I considered my target audience and clearly set out the objectives behind the digital strategy and respective metrics of success?
  • Have I identified the appropriate digital channels for my IR strategy?
  • Have I considered the resource implications involved with each digital tool?
  • Is the information on my corporate profile correct and up-to-date on key financial data platforms?
  • Am I leveraging digital media to stay up to date with institutional investor views? Am I keeping track of thought leadership material and comments published by important  investors?
  • How is my IR team staying ahead of developments in technology? Do we have a process to evaluate new digital platforms?

2) The second step is to understand, in as much depth as possible, the dynamics behind the company’s digital activity. This means understanding the profile of investors viewing the various components of your equity story through respective tools. It is also important to be aware how the patterns are changing over time in order to draw meaningful conclusions which may impact the overall IR strategy.

  • Do I understand the activity behind my IR page (ex. total number of investor views per month, profile of the investor, breakdown of unique versus returning, geographical profile, average time spent on page, most frequently visited sections)?
  • How closely am I monitoring engagement via social media channels?
  • Do I know what is the most (and least) frequently viewed or downloaded material?
  • Can I easily quantify the return on investment of my digital media strategy? How often do I review this?

3) Finally, after analysis of underlying analytics over a period of time, it is important to draw meaningful conclusions and seek alignment with broader IR strategy.

  • Do the results from my digital media plan fit into my broader IR goals? How often do I assess this and what metrics do I use to reach conclusions?
  • Are my resources focused on digital media allocated efficiently?
  • How often do I review my digital media plan and make necessary adjustments?