Although my pedigree is deep (and biased) in regard to investor relations websites, I felt having an independent voice present “must practices” for the development and management of an IR website.
(Admittedly, my goal would be to sell you one of our excellent IR Rooms.)
We asked our small-cap expert Bernie Kilkelley for his advice – in the fourth session of our six-part webinar series “What You Must Know Before and After Your IPO.” Bernie has a deep knowledge both for large and small company investor relations.
Q: When should a newly public company launch its website? Is it important to have the website ready right after the IPO?
Yes it is critical to have your IR website ready to go as soon as the company is public. Your IR website is the most important source of information for investors that is under your control, so you should make sure it is effective. Surveys have shown that 75% of institutional investors and analysts use the IR websites of companies they own or are considering buying at least once a week. So you can be sure that once a stock starts trading there will be a lot of investors and analysts looking for information and the first place they will typically go is to your IR website.
Q: When should you start developing the IR website and who should be involved?
The IRO should be the project manager for the website and the work should be started as soon as the company files to go public. The site can be developed and kept in a test environment so that it is ready to be turned on live after the IPO. The team should include your general counsel and corporate secretary, finance, and corporate communications or PR.
Q: Is it best to use a vendor that specializes in IR websites, or is it okay to build the IR website using internal resources?
If your company is large enough where you have an in-house staff that designs and maintains your corporate website, you should certainly use their expertise to make sure that your IR website has the same look and feel as the corporate website. But in developing the content for the IR website and maintaining the site, I recommend using one of the vendors that specialize in this. This is especially true for smaller companies that don’t have in-house web designers. By using one of these vendors you are making sure you have the latest technology and the expertise they bring from having done many other IR websites. These vendors also can bring data feeds and other resources to your site that help automate information such as stock quotes, historical prices, news release archives and webcast archives.
Q: What are the requirements for an IR website? Are there different requirements for a small cap company vs. a large cap company?
The SEC has several regulations that need to be followed if a public company has a corporate website. As part of the Sarbanes-Oxley rules from 2002, companies are required to post Section 16 filings of changes to insider ownership the day they are filed, and must keep them archived for one year. In 2005, the SEC issued rules that filing companies need to post their 10-K and 10-Q financial statements in XBRL format. There are also rules pertaining to Notice & Access of proxy materials that were issued in 2009, which require companies to post proxy materials on an independent website. This doesn’t have to be the company’s own site, but if a company doesn’t post the materials on their own site it should have easily accessible links from the IR website.
While the SEC requirements regarding corporate websites are not extensive, there are many best practices that have evolved over time. There are several basics that should be part of every IR website no matter what market cap or type of company. Having a good IR website is a relatively easy and inexpensive way for a small cap company to look bigger by providing the same level of information as a large cap company. This sends a message to investors and analysts that your company is committed to IR and to attracting investors.
The first basic item is a clear and visible link from the corporate home page. My preference is to have a direct, one-click link on the home page that says “Investors.” Some companies put the IR site as one of several links under an “About Us” menu, but that just makes investors and analysts spend time searching, which you don’t want.
The second basic is that the IR website should have a similar design as the corporate website, or at least have similar graphics and navigation. You want to have continuity with the corporate home page and website so that investors don’t feel like they’re on a different site.
The third basic is to have an easy to navigate menu that lists all the contents of the IR website, without a lot of sub-menus. I’ll get into what those contents should include, but without an easy to use menu it makes it difficult for investors to find what they want.
The fourth basic is an easy way for investors to request info and/or sign up for an IR email list or an RSS feed. As part of this, it is also important to have contact information. If possible you should include the name and email of the investor relations person for the company so that investors have a point of contact, not a generic email.
Bernie Kilkelly is a senior investor relations practitioner with over 25 years of experience in designing and running successful IR programs to help companies build shareholder value. His background includes serving as head of investor relations for three public companies in the financial services sector, including Delphi Financial Group, Inc. from 2001 until its acquisition in 2012 by Tokio Marine Group at a 76% premium to its stock price. In addition to serving as a corporate investor relations officer, Mr. Kilkelly has worked at leading investor relations and financial/public relations agencies in New York, including Morgen-Walke Associates, Makovsky & Co. and Robinson Lerer & Montgomery. Mr. Kilkelly is a recognized leader in the investor relations community and has served as a director of the New York Chapter of the National Investor Relations Institute (NIRI) since 2007. He was NIRI-NY Chapter President in 2012 and is currently serving as Vice President-Communications, responsible for the chapter’s website, newsletter and social media.
Q: What are the must-haves for the content of the IR website?
Some of the must-haves are:
- Company profile
- Stock quote
- Historical pricing
- Fact sheet – make sure you have a pdf that can be easily printed
- News release archive
- Quarterly earnings archive with releases, conference call webcasts, slides or transcripts if available – make quarterly financials available in multiple formats including Excel downloads
- SEC filings – make these filings easily searchable and available in multiple formats including XBRL
- Bios of executive officers and directors – photos are also nice to have
- Corporate governance info such as board committee members and charters
- Calendar of events – make sure to include an archive of past events and copies of presentations
- Current investor presentation
- Analyst coverage – list of analyst name and their firms
- Frequent asked questions page – this typically includes basic info on the stock such as the symbol and CUSIP number, trading exchange and transfer agent info.
- Contact info and an easy way to sign up for email alerts or RSS feeds
Q: What other bells and whistles can be added to set a website apart?
I don’t recommend that newly public companies add too many bells and whistles to your IR website when it is first launched. A lot of the bells and whistles you can find on IR websites are for large cap companies that have a long trading history so have many long-time shareholders. Many of these websites will have cost-basis calculators, history of stock splits – which may not be appropriate for new companies with no history.
Q: Can a company use its IR website as the primary way to disclose information to investors and analysts?
The SEC issued guidance in 2008 on the use of corporate websites for dissemination of information, and whether this would satisfy Reg FD requirements. In general, the SEC said that companies could use their websites to disseminate info but the hurdles for satisfying Reg FD are very high. For example, companies had to make sure that the public knows that the website will be used as the primary way to communicate. As a result, very few companies are doing this. NIRI did a survey in 2012 and 88% of companies said they had no plans to use their website as the exclusive means of disseminating info.
Q: Should you be concerned about the traffic to your website and are there ways to increase visitors?
You should be regularly monitoring the traffic to your website and your IR website host should provide you with regular statistics on the number of unique visitors and page views so that you can see how investors are using your site. They should also be able to provide you with info on where visitors are coming from, for instance are they coming from Google searches on your company name or are they coming from brokerage firm sites like Fidelity or eTrade. One easy way to drive traffic to your IR website is to include a direct link to the IR site on your press releases, rather than using the corporate website address.
Q: Should you be careful about linking to outside data sources?
Yes, when you are using outside data sources for stock price or historical information, make sure to clearly indicate the source and include necessary disclaimers. For links to items like conference call transcripts, you may want to provide an intermediate screen that indicates the user will be redirected. The SEC included guidance on the use of hyperlinks to third-party information in their guidance on corporate websites.
Q: Should you include social media feeds on your IR website?
If your company is using social media as part of your IR communications strategy, you should integrate this onto your IR website to give it increased visibility. But for most newly public companies, I would recommend waiting and focusing on the website itself first and getting that right before spending time and resources on launching a social media program.
Q: Is it important to have a separate IR website designed for use on mobile phones?
With the majority of internet traffic migrating to mobile devices it is increasingly important to have mobile versions of websites to optimize the user experience. Many older versions of mobile IR websites remove most of the graphics and slim down the content, which can make the site much less effective. As part of the initial design of your IR website you should work on development of a mobile site and if possible launch it together with the main site, or sometime soon after.