Campaigns: A network first for National Grid - Investor Relations

National Grid was originally privatised in 1990 and owned by the 12 regional electricity companies. In December 1995 it was demerged and listed on the Stock Exchange. Many of the one million private shareholders inherited shares because they had shares in the regional electricity companies.

National Grid was originally privatised in 1990 and owned by the 12

regional electricity companies. In December 1995 it was demerged and

listed on the Stock Exchange. Many of the one million private

shareholders inherited shares because they had shares in the regional

electricity companies.



Before the initiative National Grid’s only contact with private

shareholders had been a mailing in March to answer commonly-asked

questions, and the AGM.



Objectives



To open dialogue with private shareholders, to find out their likes and

concerns and to tailor IR communications.



Tactics



The Networking Programme was launched at the AGM in July and a group of

30 shareholders were selected by ballot to take part.



National Grid’s in-house IR team, aided by Financial Dynamics, used the

results of a pre-event questionnaire to structure a visit programme that

would give the focus group an understanding of the factors influencing

performance and the parts of the business which contributed most to

profits.



A two-day fact-finding visit took place in December and included tours

of the National Grid Control Centre, Research and Development

Laboratories and Energis, the group’s telecomms subsidiary. The

chairman, chief executive and managers in charge of different divisions

made presentations to the group and were available for questions. Issues

such as financial performance, business environment and strategic

outlook, asset efficiency and environmental management were

addressed.



After the visit an independent research company, BPRI, sought the views

of the group through discussion sessions and a questionnaire and

reported its findings in an evaluation document. An exclusive feature

article was also arranged with Robert Cole of the Evening Standard to

flag up National Grid’s commitment to investor relations.



Results



’We didn’t start out by expecting the feedback to be brilliant. We hoped

we would get constructive criticism,’ says Kathryn Rhinds, National

Grid’s investor relations specialist. But the visit was a clear success,

with 95 per cent of participants rating it a useful exercise. Before the

visit only 8 per cent thought they knew National Grid very well compared

to 48 per cent afterwards. The remaining 52 per cent said they now knew

the company quite well. 62 per cent thought quality of management was

better than expected and 86 per cent were more impressed with the

quality of the individual businesses than they had anticipated. However,

only 33 per cent felt the prospects of National Grid as an investment

were better than expected, although 43 per cent said they would increase

their shareholding and nobody said they would sell.



One of the group who was concerned about the safety of pylons commented:

’I feel that those fears have now been allayed, and whereas before I

came here I had considered selling the shares, I think I will probably

keep them’.



The visit was filmed and with vox pops will form the basis for the AGM

video. Questions from the group will also be incorporated into the

annual report. Rhinds feels the most important message from the focus

group is the interest in seeing the human face of the company. The visit

to the Research Laboratories went down particularly well and case

studies highlighting specific activities will be included along with

performance issues in future IR communications.



Cole’s article in the Evening Standard praised National Grid’s efforts

to keep a normally marginalised group informed and contrasted its

attitude with that of British Gas, whose chairman has said he would like

to be rid of smaller shareholders. The Independent on Sunday also ran a

positive piece, and there were reports in three top regionals.



Verdict



National Grid believes this is the first time a UK company has organised

this type of event on this scale for private investors. With 95 per cent

of the focus group saying other companies should follow its lead, this

was a good move.



The focus group gained a deeper insight into the company, but the

challenge now is to communicate this to other shareholders. There is a

question mark about how representative of the one million private

shareholders this group of 30 really was. National Grid now has a clear

picture of the level of understanding, concerns and interests of

shareholders and can tailor its IR communications accordingly.



Client: National Grid

PR team: In-house and Financial Dynamics

Campaign: National Grid Networking Programme

Timescale: June to December 1996

Budget: approx pounds 10,000



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