VideoDrilling Down On Rig Counts
In addition to the expanding services of companies such as Shareholder.com and CCBN, a number of other technology vendors now offer products that bring enhanced transparency and other benefits to IR.
Recently, more than 1,000 companies tried out new software from a company called Enumerate that replaces the usual static financial charts presented on Web sites with what enumerate calls interactive data views (IDVs). Investors can visit a company's Web site and create a variety of views of corporate data, drilling down for details that could help them to, for example, draw more-accurate comparisons between one company and another. "The software enables IR to present information in a more meaningful way," says Jeffery Erber, director of marketing at enumerate. "Transparency builds credibility."
Enumerate's customers include public companies such as Sallie Mae, Wilson Greatbatch, and Baker Hughes, a large-cap oil-field services company. According to Gary Flaharty, director of IR at Baker Hughes, the software boosts both communication and transparency by, for example, enabling his firm to provide a weekly summary of so-called rig counts, one key measure of the industry's drilling activities around the globe. Investors can click on the rig-count data and the underlying IDV technology will allow them to create tables and charts that can be transported into other presentations.
Interactivity is at the heart of many new IR technologies, in large part because, as Shareholder.com's Schultz says, "companies want to provide greater business context around complex financials." Software maker MicroStrategy, which parlayed its business-intelligence prowess into a boom-and-bust ride that typified the dot-com era, now seems to be stabilizing and sees plenty of opportunity in winning sales by stressing the demands of Sarbanes-Oxley compliance.
The company claims that providing "live reports as opposed to static printed reports" represents one of the best practices for ensuring financial transparency and that live reports enable investors to drill down to "really understand the root cause of any problem or anomaly." MicroStrategy, which says the latest version of its software was designed specifically to meet new financial reporting and analysis requirements, claims that more than 60 percent of CFOs believe that their existing financial applications are inadequate to meet such requirements.
No doubt there is marketing spin at play in some of this. MicroStrategy's new Sarbanes-Oxley-friendly release, for example, reached the market just a little more than a month after President Bush signed the act, and is labeled Version 7.2.1 — hardly a massive overhaul. Of the many companies hoping to leverage Sarbanes-Oxley as a sales tool, in fact, few have made any substantial changes to their products. But that doesn't mean they can't play a major role as companies enhance their internal controls and processes regarding disclosure, transparency, and risk management.
Board Gains
An overarching concern addressed by Sarbanes-Oxley is the frequent disconnect between the objectives of shareholders and those of management and the board. As Gerry Hansell, a vice president of BCG, notes, "The board is supposed to represent shareholders but rarely has direct contact with them." Pfizer's Foran says that at the least, a CFO or investor-relations officer should communicate shareholder sentiments to boards on a regular basis, and BCG's Olsen says, "Information from [investors] needs to get into the corporate dialogue more explicitly and earlier, when plans are being made rather than implemented."
Here again, new Web-based software and services may help by aligning investor and management/board objectives and providing management with an accurate and timely assessment of shareholder expectations. As an example, b2i Technologies offers a full array of corporate-governance online software applications, not with the aim of giving investors a clear view into corporations but vice versa. The products allow companies to see what investors are doing on corporate Web sites, and graphically displays investor understanding, reaction, and expectations in real time. The software captures information about site visitors, for example, and automatically adds them to a contact list while also prompting them to sign up for E-mail alerts.
The software puts a premium on E-mail contact, allowing companies to push out feature-laden E-mails (including pictures, hyperlinks, embedded financial data, and polling questions) while receiving and categorizing feedback from current and would-be investors. "These capabilities allow investors to participate in a two-way dialogue with the company and provide information that can be incorporated into management decisions," says Troy A. Ussery, president and CEO of b2i.
"We brought in b2i to enhance our investor-relations Web site," says Tyler's Miller. "It's enabled us to set up different kinds of distribution, and provides content-management capabilities so we can target our information."
Tyler allows investors to create their own customized portals so that they can receive the information they're most interested in, be it charts, E-mail alerts, or various presentations. Tyler also gives investors easy E-mail access to headquarters so that Miller and other executives can answer any questions investors may have, and posts questionnaires on the site to gather additional information from site visitors. Miller says he uses all the data about investor impressions and concerns when he makes quarterly reports to the CEO and board.
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