More shareholder activism equals more responsive companies: ICR study

Corporations are responding to shareholder inquiries more frequently than they did last year, but they should use their IR websites in more dynamic ways, according to a study from ICR.

Alibaba Group's pre-IPO roadshow video was cited by ICR
Alibaba Group's pre-IPO roadshow video was cited by ICR

NEW YORK: Companies are much more responsive to shareholder inquiries this year than the last, according to a study released Thursday morning by ICR.

In 2013, 35% of the company websites reviewed as part of the study did not respond to investors’ requests for information via the email addresses listed on their investor relations pages. One year later, the number of nonresponsive corporations dwindled to 23%, according to ICR’s second annual IR Website Benchmarking Survey of companies in the Russell 3000 Index.

ICR president Don Duffy attributed the increased response rate in part to a rise in shareholder activism.

"There has been a lot of criticism from shareholders about lack of responsiveness from companies," he explained. "Because of this, I think every company today is trying to be a lot more responsive to shareholder inquiries."

However, the study also found that companies need to better leverage their IR websites. As of this year, fewer than 5% are doing so, according to the survey.  

Alibaba’s recent roadshow IPO video is the "best example" of the kind of footage companies should be producing for their websites, Duffy explained. However, he added that one-third to half of companies that include video in their IR efforts use it for pre-IPO roadshows, then drop it, the survey found.

"We know for a fact the first place an investor [seeks out] is the shareholder-relations page on a company website, so the content you put there can substantially upgrade the learning experience they get from visiting it," Duffy added.

The survey also found that 97% of companies made their IR website accessible from the corporate homepage in a single click, on par with the previous year, while 83% of companies’ IR websites provided email alert functionality. This was relatively flat in comparison with last year’s survey, which found that 84% of companies did so.

"Generally, what came out of this survey is the fact that it is clear companies recognize the importance of the IR page, because it is almost universal that they are creating ease of access from their home page," Duffy said. "Even big consumer companies that historically haven’t done the best job are doing improving upon their IR pages."

The survey was conducted in June and July and measured different aspects of 2,893 public companies’ websites, such as IR website accessibility, access to press releases and Securities and Exchange Commission filings, video use, access to IR contacts, and responsiveness to IR inquiries.  

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