John Wheeler is constantly on the lookout for new technology that will give investors, analysts and the media timely news about the company he works for.
"What we're trying to do with the technology and the Web is to provide fair and wide communication and make it more immediate for all of our investors," says Mr. Wheeler, vice-president of investor relations at Vancouver-based Telus Corp.
"Our goal is to level the playing field of communication . . . [making] it fair for big and small investors," he says.
Telus is not alone. In the wake of a spate of business scandals, companies of all sizes are making greater efforts to keep their investors well informed about what they're doing and why they're doing it.
And thanks to continuing advances in technology, investors can go on-line these days not only to find out the latest stock information, but to read annual and quarterly reports, request company fact sheets, vote on important issues or take part in virtual shareholder meetings.
The result, say investor relations professionals, is equal opportunity for all.
"Today I can get the information on my desktop as an individual investor at the same time that the other investors get it," says Richard Wertheim, managing director of Toronto-based investor relations and public relations consulting firm Wertheim & Co. Inc. "So we now have for the first time a truly level playing field."
Since last year, Telus has been putting its annual and quarterly reports on-line. All employees receive annual reports electronically, and, last March, 15 per cent, or 27,000, of the telecom company's 180,000 annual report print run was sent electronically. That saved about $80,000 in postage costs, which was partially offset by the cost of building the on-line site. Nevertheless, the figure was up from 9 per cent the year before.
Dominic Jones, editor of Toronto-based IR Web Report, an on-line resource for IR professionals, says companies can expect to save about $7 for each shareholder each year in postage costs by making more information available on-line, translating into millions of dollars if a company has millions of shareholders. "You just have to do the math."
And for the past several years, those wishing to attend one of Telus's annual or quarterly meetings have been doing so either via conference call or by logging on to its Web site and then hooking in to a Webcast event. The meetings are archived immediately afterwards, complete with the accompanying slides and graphs, so investors who missed a session can tune in at their leisure or review the material they saw live.
During Telus's most recent quarterly meeting, held at the end of July, 236 people logged in, either through conference calls or over the Web. If a company is "really in the limelight and you've just done a big merger and acquisition," says Mr. Wheeler, Webcasts will draw bigger crowds. Some Telus Webcasts, such as one announcing its October, 2000, acquisition of Toronto-based Clearnet Communications Inc., attract as many as 500 people.
All of this has earned Telus accolades, with IR Web Report ranking the firm among the top Canadian companies in its global ranking of IR Web sites.
Mr. Wertheim, who has been in the business for 30 years, is pleased to see the "democratization" of IR. Disclosure of information used to have a cascading effect, he says: corporate word got out primarily by news releases so only those with access to a newswire -- analysts, large corporations and the media -- got wind of things early and could act immediately. It could then take up to a week for the news to cascade down to smaller shareholders.
But according to Mr. Jones, the U.S. Securities and Exchange Commission's ruling of 2000 called Regulation Fair Disclosure changed all that, laying out stiff penalties for public companies that gave preferential access of information to market professionals and certain shareholders.
"Reg FD came along and said, 'The Internet exists and there is technology to Webcast, at low cost, an audio of the live conference call so put it on your Web site,' " Mr. Jones says.
"Companies did it as a defence. It drove lots of companies to use the Internet a lot more actively."
Philip Koven, vice-president of National Investor Relations, a division of National Public Relations in Toronto, recently took a proxy battle on-line by creating a Web site for a group of shareholders who wanted to elect an alternate slate of directors. He has heard of companies, particularly in the United States, that are offering up interactive financial statements on their Web sites so investors can play 'What If' games based on findings from their annual reports.
The Telus IR Web site includes an event reminder box so investors can be notified about upcoming meetings and notices, an interactive stock chart tool letting investors compare the stock's performance against other sectors, and a glossary of financial and telecommunications terms.
The focus for 2004 will be on posting all the company's corporate governance information in one area of the Web site so it's easy for investors to find, says Mr. Wheeler. The company's ethics policy has already been posted, he adds, "but it's orphaned right now."
E-voting is also gaining ground. Patricia Rosch, senior vice-president at Mississauga, Ont.-based ADP Investor Communications, which conducts proxy voting and financial reporting for 14,000 North American companies, says the number of shares voted by retail and institutional investors using the Internet has increased steadily. It reached 75 per cent in 2003, up from 51 per cent in 2002 and 28 per cent the first time Canadian regulators allowed this option in 2001.
But investor beware: technology also has a downside. Mr. Wertheim says having instant access to information means there's no time to sit back and digest it before acting on it.
"[It's] shoot first, aim later, or consider what to do later," he says. "It has added to potential volatility in the markets. It has also added the danger of misinformation -- rumour, gossip, innuendo or just plain false information -- being spread globally instantaneously."
Technology is also shaking up the entire structure of the investment industry, with fewer analysts and fewer funds soon to be commonplace, he predicts. With more information at their fingertips, he says, people are perfectly capable of managing their own portfolios and making their own mistakes.
And what about corporate governance?
"Technology doesn't make people more honest," says Ron Blunn, president of Toronto IR consulting firm Blunn & Co. "It helps them to communicate. It makes it easier for investors to compare what companies do because you don't have to phone everybody up and get them to send you the print reports. You can just search the Web."
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