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
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.
To open dialogue with private shareholders, to find out their likes and
concerns and to tailor IR communications.
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
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
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.
’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
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.
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