OIL giant ExxonMobil Corporation published its 2006 corporate responsibility report yesterday. I thought it was pretty good — until I came across something I knew wasn’t true.
In a section of the report called Communication and Engagement, the company says that good stakeholder relations are “essential to help identify and manage key issues.” It then lists its key stakeholder groups and the ways in which the company engages or communicates with them.
For shareholders, of which Exxon Mobil reports having 2.5 million, the company lists 14 engagement activities. One of them is “email address.”
In other words, according to Exxon Mobil, one of the ways that shareholders can engage the company is via email.
But that’s not exactly true. Not at least when it comes to Exxon Mobil’s investor relations department. You can’t email them.
Visit the company’s investor relations section and you will see that there is no opportunity for shareholders to send email to the IR department. There are phone numbers, but no email. If you are a shareholder outside of North America, it’s a long-distance call.
Here are two screenshots. The first is of the Shareholder Contacts page.
The second screenshot was taken from the Investor FAQ, which is where some companies hide their IR department email addresses. But not Exxon Mobil — phone numbers again. And, once more, if you happen to be on the other side of the world, it’s a long-distance call. How inconvenient for someone who is online.
Now lets go back to that page in the new Corporate Responsibility report. Notice that the term “email address” is in blue. It’s a link.
Click on that link and you go to an email form with a drop-down menu that you are supposed to use to indicate the subject of your email. Notice that the menu choices don’t include anything specific to shareholders or investors. Their questions fall under “other,” I guess.
Detached IR departments a widespread problem
What we have here is a classic example of something that I suspect the majority of investors already know. At many public companies, even small ones who you’d think would love to hear from investors, investor relations units are often the least accessible outward-facing departments.
Now some might interpret the lack of direct email for IR contacts as arrogance or elitism. Others will see it as a survival tactic by a small, rotating and overwhelmed staff. But one thing is clear: IR departments today often have little to do with building and maintaining relations with mass audiences. And everyone can see it.
Let me state emphatically and as LOUDLY as can be done in writing, this problem is NOT UNIQUE to this company. Many IR departments in every part of the world have failed to keep up with changing audience expectations and shifting standards of effective web-based investor communications.
Seriously, you can’t have 2.5 million individual shareholders — or even 25,000 — and expect a skeleton staff, some of whom are merely passing through, to handle that kind of audience while also being the main liaison with analysts and institutional investors.
It’s stupid. It’s bad management. It doesn’t enable you to “identify and manage key issues.”
Yet that’s precisely what is happening at many public companies around the world. IR is a detached profession sandwiched between the executive suite and short-term focussed buy- and sell-side analysts who have a very narrow sense of what’s important.
IR departments, particularly at big companies, are mostly isolated from the vast majority of their companies’ shareholders — and they are doing little to break that isolation by using the one tool at their disposal that is ideally suited to mass shareholder engagement: the Web.
Meanwhile, that same majority of shareholders that IR departments are ignoring are also the ones contributing to the debates that affect companies in other realms. Shareholders are not just shareholders, they’re are voters, influencers, consumers, parents, grandparents… people.
So when they read one thing in the CSR report and experience a completely different thing on the company’s IR website, they’re getting mixed signals at best. That is a problem for everyone else in the company who are doing their bit for engagement.
At Exxon Mobil, for instance, you can email individual directors, but not the IR department. That tells you something about how inaccessible IR is.
So what’s the solution?
I can see two possible solutions here. The first option is for IR departments to get the resources and expertise they need to start using their websites more proactively. That will help them build and reinforce their relationships with all of their investors and shareholders.
The other option is for leaders of IR departments to accept that they lack the ability to do the mass communication part of the job and cede control of that to other departments that are in a position to do the job, and do it well, such as public relations departments.
The second option is not my preferred one.
After seven years of helping IR departments make better use of the Web, I know that when empowered with the right insights and advice, and when given the right support, IR departments are capable of being the very best online communicators in their companies.