TAKE a look at these news releases put out this week by two New York Stock Exchange-listed companies about awards they’ve received for their investor relations websites and their disclosure practices.
The first is from Gol Linhas Aereas Inteligents SA, the airline firm listed on the NYSE under the symbol GOL.
SAO PAULO, Brazil, April 1, 2008, 2008 /PRNewswire-FirstCall via COMTEX/ — GOL Linhas Aereas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4), the parent company of GOL Transportes Aereos S.A. and VRG Linhas Aereas S.A., received three awards at the tenth edition of the annual IR Global Rankings (IRGR), which identifies and ranks those companies with the best investor relations practices.
For the third consecutive year, GOL was ranked first in the Financial Disclosure category in the Consumer Services sector and in the TOP 5 in Latin America.
The Company’s IR website was also ranked in the regional TOP 5. All in all, 160 companies from 32 countries took part.
The Financial Disclosure category rewards those companies with the best results disclosure procedures, especially regarding access to information and equality of treatment, while the IR Website category recognizes those firms with the best IR sites, in terms of content, navigability and interactivity.
“GOL establishes benchmarks on all its operational fronts and communications is no exception,” explains Richard Lark, GOL’s CFO. “We have recently introduced benchmarks for financial communications with journalists and fixed-income investors.”
And here’s the second one. It is from TAM S.A., the airline company listed on the NYSE under the symbol TAM:
SAO PAULO, Brazil, April 3, 2008, 2008 /PRNEWSWIRE-FirstCall via COMTEX/ — TAM (Bovespa: TAMM4 and NYSE: TAM) has just been recognized by Investor Relations Global Ranking 2008 (IRGR) as one of the five best companies in Brazil in the area of Corporate Governance, and was the only airline to receive this distinction.
“This recognition underscores the company’s commitment to transparency in its relations with investors and shareholders,” says Libano Barroso, vice-president for Finance and Management and director of Investor Relations.
The award, which reflects best practices in management and dissemination of information to investors, was created in 1999 by MZ Consult, a financial communications and investor relations consultancy. In the 10th edition of the award, 160 companies from all over the world competed in five categories: investor relations website, financial disclosure, corporate governance, online reporting and highest vote by popular choice, the last two categories nominated by representatives of the financial market.
TAM was also named one of the top five Brazilian companies for best investor relations website (http://www.tam.com.br/ir) by the technical committee.
What neither company says in their releases, however, is that the company which bestowed the awards on them actually is responsible for conceiving of, managing and currently hosting their investor relations websites. The firm that ranked them has essentially given itself awards.
And because the companies don’t disclose the relationship between the awards coordinator and themselves, you could easily be mistaken in thinking they’ve been recognized by an arm’s-length organization.
The company behind the Investor Relations Global Rankings is MZ Consult, a Brazilian investor relations firm that issues its IRGR news releases with New York placelines, and which is the dominant investor relations website vendor in its home market.
A news release by MZ Consult lists KPMG, Arnold & Porter, NYSE Euronext, Bank of New York Mellon, Demarest & Almeida, PR Newswire and Bloomberg as “supporting entities” of the IRGR 2008 edition.
Another fact of note: seven of the companies recognized by the IRGR as having investor relations websites in the top 20 worldwide are actually on MZ Consult’s client list, but this fact is not disclosed on the IRGR website or in its news releases.
And you and I thought good investor relations was all about transparency.
Full Disclosure: Since part of our business is ranking IR websites, we could be seen as having a competitive interest in this issue, although I would argue what we do is very different because it is non-public and we are 100% independent of the IR website building and hosting business. Nonetheless, regardless of what you think of our conflict in raising this story, it should not detract from the facts. There is a lack of disclosure about the awards for disclosure.