African Investor Relations

Kenya’s stockbrokers and investment banks are moving fast to automated systems. They say that the future of stock trading is going to be via the Internet and mobile phone applications, according to a report in the Business Daily newspaper(www.businessdailyafrica.com). Kenyans are fast with technology and moved en masse to leapfrog the rest of the world and adopt new technology for mobile money transfers.
Recently CFC Stanbic Financial Services (www.stanbicbank.co.ke) and Suntra Investment Bank (www.suntra.co.ke) launched automated trading systems (ATSs). African Alliance Securities, Faida Investment Bank and Drummond Investment Bank said they plan to launch online trading platforms early in 2011.
The report quotes Faida Investment Bank Chief Executive Bob Karina: “Market players will have no choice but to create systems that allow clients to operate from home and offices.” He added that online trading will save brokers the costs of opening new branches and other costs of reaching clients. He said Faida had contracted information technology company Tangaza to design an online trading system similar to Suntra’s.
King’ori Githinji, Executive Director at Drummond Investment Bank, reportedly said improved Internet speeds and reduced Internet connection costs have catalysed the growth. He said Drummond already offers some online services, including client orders through e-mails linked to their accounts.

According to African Alliance Securities managing director Lucas Otieno, an important milestone will be when there is connectivity between the stockbrokers’ back-office systems and the Nairobi Stock Exchange (www.nse.co.ke). The NSE is upgrading its back-office system estimated to be complete by the end of the first quarter of 2011 for KSh100 million cost. He said: “Once brokers get access to the NSE back office system then we’ll move to the next level.” He forecast that it could reduce settlement time. According to the report, it takes up to 7 days to complete a transaction including transfer of ownership and receipt of funds.
The paper also quotes Michael Gichohi, Chief Executive of Suntra Investment Bank and Chairman of the Kenya Association of Stockbrokers and Investment Banks that online trading could bring a revolution to share trading: “No one imagined M-Pesa (a mobile money system) would be as big when it was started.”
The move could also open up the stockmarket to a much wider range of participants than the 1.8 million accountholders listed at the Central Depository and Settlement Corporation. The automated trading systems (ATSs) should permit online trading via mobile phones and could attract some of the 19 million mobile phone subscribers in Kenya, of whom 13.5 million use Safaricom’s M-Pesa money mobile transfer service.
Treasury Permanent secretary Joseph Kinyua reportedly warned: “Companies that intend to remain competitive and in business must embrace technology in their processes,” at Suntra’s ATS launch last week.
CFC Stanbic Financial Services managing director Nkoregamba Mwebesa was reported saying the new systems have attracted interest from Kenyans living abroad: “Investors both in the country and those in the diaspora have lauded the launch of the online share trading platform since it provides a convenient and innovative solution to shares trading.” He predicted that online trading will eliminate investor queues in future and all trading will be done without the need to go to brokerage offices.

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Africa’s capital markets are not big enough for listed companies to justify employing full time investor relations officers to actively craft long-term investor relations strategies and engage investors on an ongoing basis etc. In Africa the FD and CEO is the IR officer, when needed. Which is not often. In Africa the issue is about information dissemination. There’s not enough of it.

When we talk to listed companies, multi-national ones, they point out indirectly, that their corporate reputation is worth less in Africa. These large multi-nationals state that they have only listed on an African stock exchange out of a sense of “good corporate citizenship” (this really means that the company is a foreign one and needs “local” ownership to protect itself politically).

The executives of these multi-nationals point out that the cost / benefit ratio for their companies can be negative as there is “no money” perceived in investor relations. This is a very basic response.  These comments are from executives who fly First Class  to and from Europe, the extra costs of which could establish a basic yet progressive online investor relations function, one that showcases brand, and actually implements good governance practices.

This is where these larger companies have forgotten (one has to assume that they have at least heard of IR) the basics. “Our IR is primarily focused on those who wish to invest in the London market, as this is where we are most likely to gain anything.” No mention of shareholders’ basic rights and, more importantly, no mention of progressive corporate governance practices which should underline the brand they represent. The fact is African companies need more information published online than other markets because the market structures are inefficient.

Some comments we receive directly from senior executives-

- we (AIC) are perhaps “ahead of our time and that the markets in Africa are not ready”.

By collectively not doing anything, executives ensure Africa remains a market whose status will always be “behind” and “not ready”. It’s the famous story of the Bata shoe representatives asked to go into Africa to assess the prospect of selling shoes to Africans. The first one returned saying that African did not wear shoes and so the prospects of selling shoes was poor. The second said that Africans did not wear shoes and so the potential was huge. The same scenario exists in online investor relations.

“we have a website” . Yes and its terrible and out of date.

“our IR (or absence thereof) is handled by our holding company”.  Not so. Not possible. It should be handled in accordance with good governance practices and the laws of the country in which the subsidiary is incorporated.

“we already have an investor relations function: our annual report appears online”. The publication of an annual report online does NOT constitute a complete  investor relations function.

Director and regulator ignorance in the face of technological innovation online globally means that Africa is falling further behind the rest of the World.

Making basic investment information available online is about corporate governance and information dissemination, not IR in the traditional sense.We are bringing change to African markets one company at a time.There are a few signs of hope, some directors (with grey hairs) are sending me messages from their iPads and some directors are saying “just do it”. They don’t have the time to become informed, but they do know that the Internet is the way forward.

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Proshare Nigeria – a good portal on Nigerian equities and related issues highlighted the extent to which Nigerian regulators are uninformed in their communications to the market. A good colleague of mine once said that the first step to wisdom is acknowledging one’s ignorance and this applies to the article below, which illustrates the extent to which the Nigerian Stock Exchange needs help or more educated staff in communicating with the market:- an open invite to all of those PR firms chomping at the bit to get some Nigerian action?

Proshare shared the ‘advertorial’  on the search for a PR firm which was published on the SEC website for members of the public:

Appointment of a Rapid Response Public Relations Consultancy

“The Securities & Exchange Commission wishes to engage the services of a resourceful Public Relations Consultancy to undertake on behalf of the Commission media interventions in the next one month. Public Relations Consulting Firms wishing to be considered for engagement are invited to submit proposals taking cognizance of the requirements listed hereunder.

We must commend this open display of transparency at SEC especially in its open declaration of purpose and engagement of the public – using its website much more than before.

Prior to now, most interventions from SEC had come through selected press briefings and exposes on the front pages of newspapers – a move that has gained at least a bit of credibility since, as you’ll recall, formed the public communication strategy through which the initial story that set the ‘NSEGate’ in motion broke. They could have continued to deploy this model as effectively as it has done to date; but it appears a change in approach and objective has necessitated a change in tactic.

Most of the media interventions had sourced from “anonymous sources.” Indeed, so many stories and commentaries have come out in the media citing such fabled sources that the market must be wondering who and what to believe again; which means you should feel free to completely disregard any more of such communications as the SEC has now decided to take a hands-on approach to its communication requirements.

Yet, reading this SEC advertorial, it would take something deeper than insight to configure the purpose, motivation and intent here.

What are they responding to? Why the advertisement now when evidence abounds that the media unit had been involved in such – in furtherance of its legitimate role – to engage and ensure that the media represents the regulator fairly?

The best response they can give is efficiency and diligence in the discharge of its responsibility and core mandate – not whitewashing of image. So what is it about this advertorial that should interest vanguards of the market?

First is the choice of language deployed to communicate what could otherwise have been a routine engagement of a third party consultant for an issues based advisory service (including an information management capacity support).

Why bid for a 1-month engagement that makes it appear as a campaign pitch? Further, describing the invitation for bids as “rapid response public relations consultancy” for the Commission was, to say the least, unbecoming of a regulatory institution like the SEC, as it was uncouth and ‘smacks of propaganda rather than enlightenment’. Worse still, the statement betrayed a lack of understanding of the subject matter of public relations – as a concept and practice – in the discharge of the Commission’s responsibilities.

The announcement said that the ‘Consultancy’ would make media interventions on behalf of the Commission. This is a dubious proposition. For one, there is something like “offensive PR intervention“, as was manifest in the Commission’s recent response to media reports of its operations and sense of accountability.

Given the choice of language of the SEC announcement, the proposed scheme suggests an impending action by the Commission or a desire by the Commission to do something that might be unpopular or in the extreme, inimical to public interest, through the manipulationof the media, using a “resourceful public relations consultancy”.

Reflecting deeply, what deed or proposed policy of the Commission would require a “Rapid Response Service” PR consultancy?

We may learn from this engagement a new world-class practice on how regulators should relate with the general public and its markets. And to think that the announcement was made by the Media Department of the Commission! What does this department exist for, in the first place, to warrant the proposed engagement? Given that the Corporate Affairs function itself was one of the advertised offices in its recent vacancy advertorial by KPMG, it is possible therefore that their exists capacity and competence issues with the media aspect of its functions – and this surely would not be resolved by a one-month engagement.

It is important that we understand why they are trying to hire a PR firm therefore. Is it to clean up the image of the SEC and the stock exchange to international investors since they are requesting for a firm that has international affiliations?

In any case, from a professional public relations perspective, the kind of brief proposed by SEC could have had a more positive outlook if the PR Consultant’s brief was described in a way that encourages one to believe that the consultant would be looking to engage the media (on behalf of the Commission) in manners that respect the independence of the media as a professional practice.

One hopes that the Nigerian media have taken note of this proposal by the Commission to ‘intervene’ in their editorial judgment and management.

Curiously, there was no closing date for submission of bids.

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We have categorised all of the website feedback of our clients’ websites from the commencement of our business. The results are interesting. Our exercise excludes the feedback of the two online investor relations IPOs we have done. The results appear in the pie chart below:-

What are the key take aways from the results of our clients’ website feedback?:-

1. 22%. “Are share registrars inefficient” or is an interactive website a good complementary tool to channel shareholder communications? Probably a bit of both. The fact is that the majority of feedback relates to shareholder administrative issues.
2. 15%. “Who are the potential investors?” Largely retail shareholders who have visited the website, digested its content and now want to know how to invest.
3. 12%. “Analyst feedback” submitted through the website is an easier way for analysts to access management on an ongoing basis. Executives are busy and may be difficult to contact by phone. Our undertaking to monitor our clients website feedback response times ensures that queries from analysts are accelerated to the CEO or FD as soon as possible.
4. 11%. “Operational issues” relate primarily to queries relating to enquiries about our clients’ products and or services – how do I buy this? – where can I find that etc?. For clients in the retail sectors this feedback is a solid source of business leads.
5. 9%. “Business development”. For some clients, particularly ones operating in more than one geographic location, this category of feedback is by far the most valuable as it relates to approaches to form business partnerships, investments or strategic alliances.
6. 6%. Human resources. This traffic relates to people wanting to work for our clients companies and here, there are two approaches our clients take. Ignore all of it, or engage every applicant as if they might be a potential employee. In the latter case using the website users interest in the company to extract a full set of information (resume etc.) for your records is an excellent way of accumulating a database of potential employees.
7. 6%. Procurement. This relates to people wishing to sell their products and or services to our client companies. Similarly, there are two approaches: engage or ignore. The former will entail the solicitation of all the information needed to determine whether our clients should do business with the person submitting the query. Submission of accounts, references, marketing material etc. is a good practice due diligence process.
8. 4%,3% and 1%. “Compliments”, “Media” and “Complaints”. Website users like a good online experience and they say so through our client websites. This is unsolicited feedback so it means a lot. All of our clients have direct communications channels with the main media houses ThompsonReuters etc. and the website provides an easy assured way for them to communicate with our clients’ management. Lastly, we are not all perfect and there are always complaints – senior management should always respond to these immediately because its critical to business and reputation.

All in all about 50% of our feedback relates to investors and investor related issues and and the remainder to commercial and administrative issues. The former satisfies corporate governance obligations, whilst the latter more than pays for the cost of adopting a progressive online corporate communications function, especially when “OCR” or “online corporate reputation”, an intangible asset, is being grown.

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This is the first part of a 5 part series of FAQs we receive from clients. From the horse’s mouth.

In order to manage shareholder communication and proxy information on line and immediately distributed to shareholders and analysts; -our concern is that some of our shareholders do not have email addresses/internet access/computers, how is this then managed outside of our company?

Listed companies have a corporate governance obligation to use all means available to it to communicate with shareholders. No method of communication is perfect. This obligation funnily enough is not enshrined in law and this is one reason why it does not receive the attention of directors.

The website, printed copy, adverts, SMS, search engine optimisation etc are all media through which these messages can be delivered. In the modern day the costs of doing some of these can be negligible e.g. emails. On the other hand, in the modern day the postal system, especially in Africa, is very inefficient and costly.

Many shareholders (especially retail shareholders) own their shares through “nominees”, so never get their shareholder voting or other material. The option of using new media enhances shareholder governance and this benefits corporate reputation if company combines communication with corporate brand.

So there’s no one best way of communicating it’s a mixture of a number of ways in a manner that cost effective and gives shareholders what they need.

In short there’s nothing you can do about those investors that do not have access to email or computers. The efforts of a listed company to communicate with their shareholders are therefore two-fold:-

BOTTOM UP – your company sends information to your shareholders in your shareholder list at a particular point in time. This is not fool proof because of nominees and inefficiencies in the postal system.

TOP DOWN – any shareholder, whether they be registered in nominees or directly can come to your website and make educated investment decisions and obtain timely and comprehensive information to support these decisions.

Between the top down and the bottom up approach your company will have most bases covered.

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Nation Media, a listed company on the Nairobi Stock Exchange, has cross-listed on the Rwanda Stock Exchange. It is also cross-listed on the Uganda Securities Exchange and the Dar es Salaam Stock Exchange.

As a cross listed company what are the basic investment data information tools to employ?

1. Online charts of the share prices and volumes for the shares traded in each country in the currency of the country and volumes related to the shares traded in THAT country. WHY? if investors are going to trade shares they need to know what the likely market is.
2. Share chart with prices and volumes for the whole company in the home currency.
3. Liquidity statistics of trading in each market.
4. Full implications of how the trading system works cross border – what to do when and how and who to see and when
5. A summary of the communications practices employed to ensure that information is released broadly and simultaneously in each market.
6. Statistics on cross border trades in shares – volumes and dates.
7. A website APP that provides an indication of the arbitrage opportunities implied from the differing share prices in each market.
8. An overview of the number of shareholders in each market (this information is available at the click of a button for share registrars).
9. An overview of the operations in each market of the listed company.
10. The contact details of the registered brokers and share registrars to contact in case of a query.
11. Physical address where annual reports (physical ones) can be requested or collected.
12. An overview of the primary reporting regulations applicable to the company. For example Kenya now permits listed companies to ignore sending annual reports to shareholders but Tanzania does not allow this – which country rules?

There is no evidence to suggest that the cross-listings in East Africa have any substance to them from a market trading or capital markets perspective. I may be wrong but wouldn’t it be nice to have some stats.

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The 2010 Company of the Year Awards in Kenya sponsored by the Kenya Institute of Management failed to recognise investor relations in its award criteria. This is at a time when there is no firm legislative environment and the Companies Bill 2008 has yet to be promulgated because Kenya’s legislators are very busy.

Companies have set their own standards of shareholder communications. This is not good because none of them are doing a good job in the regulatory vacuum. Kenyan companies are missing out on an opportunity to shine.

The winners of the Kenyan Companies of the Year Awards are:-

The criteria for the COYA awards are everything except investor relations. That’s all you need to know.

As you are aware the standards of corporate governance have regressed in Kenya because of the obligation of shareholders to locate their shareholder proxy materials rather than have their company obligated to provide them. It all started when Safaricom sought exemption from sending out annual reports to its shareholders and the regulators did not put in place a quid pro quo. That started a trend. An unnecessary one.

Companies are able to determine their own standards of shareholder communications and this means that the majority shareholder (the one with the votes) determines what this should be. Director ignorance and apathy and an uninformed public and some sleepy regulators means that listed companies in Kenya have a unique opportunity to shine in this area of governance.

It’s an opportunity lost.

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It’s a common scenario in Zimbabwe for listed companies to have a nice and cozy investment analyst presentation. Then not provide the analyst presentation online or in hard copy to investors. Some companies that do make their information available online delete certain pages of the presentation before they do this. In most cases the key issues discussed in the Q and A session are not disseminated either.

From the CEO’s perspective this is a cop out – tell them everything and then go through the presentation post the event to delete the stuff that is sensitive. Mmmmm…. why not do it at the beginning of the presentation?

Are the brokers efficient at disseminating the information released at analyst presentations. No. Do brokers sell their analyst research online i.e. not make it freely available. Yes. There’s a gap in making information available efficiently to the market and it needs to be addressed.

This is bad corporate governance and is indicative of the absence of a formalised disclosure policy at Board and senior management level. It is also indicative of the absence of disclosure practices regulation in Zimbabwe’s market or at least the awareness of regulation. If the information is only good enough for some and not others, then it should not be good enough to publish at all.

Companies should identify the information that is sensitive, delete it from the presentation in advance  and draw up a list of things NOT to say at the analyst presentation and the drinks afterward. Share this list with the management team. It’s basic enough. It’s the right thing to do. It’s good corporate governance.

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I spoke to a Kenyan listed company yesterday. It’s starting to happen as I predicted. Shareholders are demanding hard copy annual reports.

Listed company directors in Kenya have sat back content with saving US$20,000 of printing costs now that the hard copy  annual report distribution requirement has been dropped by the regulatory authorities. But they have not invested in any PR or any additional resources to ensure that shareholders get the information that they are looking for.

But shareholders want their “book”. The annual report is a tangible product of their investment in the company. I think the issue is emotional for a retail investor. No “book” means something is wrong. A “book” means that they can read the pictures and get a nice warm feeling and touch the pages and smell the ink.

Whilst retail investors may not understand the contents, the receipt of the annual report is an important act of transparency that investors have come to expect and I suspect that even if listed companies in Kenya had zooty websites and email alerts, there would still be a concern from retail shareholders if they did not receive a hardcopy.

This points to the obligation of listed company directors to make use of all resources available to them – websites, hard copies etc. Its the management of this that needs attention otherwise a company doing all of the right things (wrongly) may still have a poor corporate reputation.

Where the regulators in Kenya went wrong is that they acceded to the requirements of Safaricom who needed  to drop the requirement to sent annual reports to all of their shareholders – all +/-800,000 to “save costs”. What should have happened is that the share registrars should have been required to record whether a shareholder could opt-in to receiving electronic communications (as defined – no-one has defined the content for this so far). Its a simple mailing list management function. The opt in should have been permanent.

At the moment this opt in function has not been functional in Kenya. The the USA the market moved from a physical to an opt in electronic regime, and then the default became electronic and the hard copy opt in was offered. But only after experience showed that this was working.

Kenya is part of Africa and so we can ride rough shod over retail investors because there are no consequences. They are uneducated, have no reasonable recourse to any law, to capability of representation, no support from the regulators.

But they are humans and they have emotions and this needs to be managed. At minimal cost to listed companies.

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The traditional model for the establishment of a stock exchange in Africa for smaller markets from scratch is to beef up the finances of a single private sector broker with development finance. Give them a fixed term monopoly in return for undertakings to carry out market development and shareholder education initiatives. It’s a quid pro quo.

This business relationship would also restrict the operations of the broker to that of trading in equities and directly related activities, say trading in T bills or bonds to ensure that the party was solely focused on developing the market.  Furthermore, the broker’s role would also to be to assist putting in place the regulatory framework.

Do I know what I am talking about? Yes, actually. I did this for the Malawi Stock Exchange, with the wise guidance of people that know African capital markets better than anyone: Mark Tunmer and Bill Picken.  I was the first CEO and Secretary of the Malawi Stock Exchange. The model worked well and should have been used in more start up markets.

There are no less than 7 brokers in Rwanda. There isn’t (or does not appear to be) the critical mass of prospective listings to enable these people to make a living from commissions. There isn’t the critical mass of corporate advisory work to enable these people to make a living out of fees. They are not there for free. So what is the motivation?

Rwanda has allowed too many brokers,  which dilutes their overall commitment to the market. it dilutes the resources available to investors and infrastructure.

I assume that the submission of business plans in licencing applications was done – so where is the critical mass of transactions that’s going to enable the Rwanda Stock Exchange to flourish? Membership to the trading platform on the Rwanda Stock Exchange should be restricted by some means, say capitalisation or undertakings to assist the Government with shareholder education initiatives.

As with most markets its up to Government to provide the supply of equities – this is what was responsible for the growth of the Malawi Stock Exchange and many others including Kenya – and with this comes a big responsibility to educate shareholders which most markets have failed to do. Especially Kenya. On the private sector front, the east African cross listings appear to have heralded a new era of economic and investment unity. In truth, the structure of the cross listings and the manner in which equities are traded is so inefficient and costly as to render the initiative meaningless. I challenge you to get any statistics on the value of shares that trade cross border.

The prospect of cross listing of East African equities on the Rwandan Stock Exchange is a political one and not a private sector one, for those companies that are considering it. For the same reasons I mention above, cross listings are not going to support the myriad of brokers in commissions and large bonuses. Why the depositary receipt structure was not adopted I don’t know.

So I don’t get it. But perhaps I am not in the loop on these things.  What is interesting though is Rwanda’s commitment to be a “cyber land-locked island” and have a computer on every desk. This is an ideal opportunity to permit electronic communications for listed companies and implement a comprehensive shareholder education programme. And make it available to Kenyans and Ugandans and Tanzanians. They need it.

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The duties of Directors will be set out in law when the new Kenyan Companies Bill is adopted into law (not anytime soon). In the interim, Kenyan companies are in no-man’s land with respect to how they are to communicate with shareholders. Kenyan directors are not acting in the interests of shareholders, they are not promoting the success of the company and they are not maintaining a high reputation for business conduct as a result.

Here is some text THAT WILL BE PASSED INTO LAW in the future. It states pretty clearly what directors should do. I further consider the implications of not implementing progressive shareholder communications practices in light of this legislation by way of a few questions:-

Duty to promote the success of the company

(1)        A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—

If Directors do not spend say US$10,000 a year in ensuring that their shareholder proxy materials are widely available to shareholders, is this acting in good faith? If money is an issue how does the Board determine what is a reasonable amount? Since the dropping of the requirement to distribute hard copy annual reports is it reasonable for listed companies NOT to apply any of the savings (many hundreds of thousands of US$) to alternative means of communicating with shareholders?

(a)        the likely consequences of any decision in the long term,

If for the sake of a few dollars thousands of retail shareholders (and possibly institutional investors) are alienated in their right to receive shareholder information, will this have positive or negative consequences for the company in the long term? The consequences in the short term are that shareholders are demanding their “book”  (annual report) direct from the offices of the listed companies. Disturbing management. How does a listed company “guess” how many annual reports to print? Should directors consider the commercial benefits of communicating with shareholders progressively as a means of obtaining some return on their investment?

(b)        the interests of the company’s employees,

Is it in the interests of employees to have all of the information available to investors in order that investors make educated investment decisions available to them? If employees have the same access to the information that shareholders do will this instill a sense of belonging and motivation?

(c)        the need to foster the company’s business relationships with suppliers, customers and others,

Does the manner in which a company treat its shareholders and investment community impact its overall reputation in the market?

(d)       the impact of the company’s operations on the community and the environment,

(e)        the desirability of the company maintaining a reputation for high standards of business conduct,

Could the absence of good shareholder communications affect a company’s reputation for high standards of business conduct?

(f)        the need to act fairly as between members of the company.

If the information needs of the institutional investors are considered over those of retail in shareholder communication practices could this be perceived to be or actually be treating members of the company unequally?

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Everyday you come from work tired, grab a beer and sit in front of the TV. The you grab another beer and another. This goes on for 20 years. It’s what you do. You grab a beer. You’ve always done it. Everyone knows you grab a beer including your wife and kids so what’s the problem?

The problem is that it’s not right. You should be looking at the garden, playing with the kids, riding your bike, playing squash or taking the dog for a walk. At the end of 20 years you are a fat, lazy beer drinking man with health problems and a dysfunctional family. But what you do everyday seems normal.

My point is it’s not the right thing to do.

The same applies to the practice of releasing earnings during trading hours, a common practice in African markets. It happens, year after year but its not the right thing to do.

Here are some insights:-

• Analyst presentations are held during stock exchange trading hours. So what if the stock exchange doesn’t care and the market is illiquid, its wrong. Companies have a moral duty to ensure that information is disseminated equally to the market. There’s really only one time to have a presentation and that’s Friday afternoon. You’ve got the whole weekend for the media and press and brokers to disseminate the information. They need a lot of time because of the inefficiency of the regulators and companies themselves.
• The content of what is discussed in analyst presentations is strategic and more often than not, far too much information is given. The invitation from the CEO presenting to speak to any member of the management team about anything is wrong, unless they have been briefed on what can, and cannot be said. And this does not happen.  There should be a precis of what was said disseminated through the corporate website or brokers asap after the event. It is fascinating to hear what slips out in the analyst presentation, specific strategies plans, market data, but read the earnings announcement, and the bland rhetorical cliches are the only thing mentioned.

There are so many responses to why these contraventions of good corporate governance practice don’t matter (the market is illiquid, it doesn’t matter anyway…) but the practical difference between doing it, and not doing it, and doing it correctly, is so miniscule that why not just do the right thing? That’s what the stock exchange and corporate governance codes say, and there’s a reason for them to say that.

If you are to release earnings during trading hours publish the event through a conference call played live through your website – they brokers on the trading floor can hear. Still not practical, but there’s always more than one way of skinning a cat.

Just like the beer drinker who gets into bad habits, the long term implications of bad shareholder communications are unseen. Fat lazy companies that don’t look after themselves and therefore their shareholders.

It’s about doing it right. Insurance.

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