ALMOST six out of 10 respondents to the Australasian Investor Relations Association’s (AIRA) 2010 IR Benchmarking Survey say they see social media’s influence increasing, while one in five has acted on or responded to information found through social media.
The survey, conducted among AIRA’s corporate members in Australia and New Zealand representing more than $680 billion in market capitalization, also finds that companies are increasingly using the web to deliver their annual reports, to webcast presentations, and to keep investors informed of news.
AIRA CEO Ian Matheson said in a statement: “We clearly see from these results that the importance of online communication is recognized by listed entities. Email notifications and webcasting are widely offered and there is a growing awareness that online annual reports need to focus on on-screen usability and interactivity.”
PDF dominates online annual report formats
The survey found that with the “opt-in” provision for annual reports –– a default electronic delivery system similar to the notice-and-access model in the US — only a small number of shareholders had requested hard copies of recent annual reports. Most said that less than 15% of their shareholders had requested hard copy, while for a number it was less than 1%.
These figures are similar to experiences in other countries and could have long-term negative consequences for mainstream investor interest and participation in the capital markets, especially if companies fail to invest in improving their online channels. Australia currently has one of the highest rates of direct stock ownership by retail investors in the world at 36%, according to the most recent ASX share ownership study.
According to AIRA, 78% of its members are delivering online annual reports in PDF only. Various important studies have shown that retail investors prefer HTML reports, while only professional users prefer to download PDF, which they often print out.
“With increasing investor appetite for interactive online documents that don’t need to be downloaded, the use of PDF for delivering online annual reports may decrease in coming years,” says AIRA.
Fully 79% of respondents said they would support expanding default electronic delivery to other shareholder communications such as offer documents.
Webcasting group investor meetings
Australian companies trail North American companies somewhat when it comes to providing the public access to their investor presentations. However, AIRA’s recommendation that companies provide advance public notice of investor presentations and provide access via webcast has been adopted by the ASX Corporate Governance Council.
The survey showed that 84% of respondents now inform the market in advance about upcoming presentations either by email (68%), website posting (58%) or through a stock exchange announcement (32%).
A total of 80% offer webcasts of analyst presentations, with most offering both live and archived options. Only 52% of respondents said they make the Q&A portion of presentations available, most often via an archived webcast on their websites.
The low number of companies providing access to the Q&A is intriguing because it can make companies appear as if they are selectively disclosing information to industry professionals. It also alienates foreign investors who rely on the web to stay informed about international companies whose securities they own.
The survey found that 78% of respondents’ companies have a blackout period policy. This compares to 82% of US companies that have a quiet period and 98% that have a trading blackout period, according to a National Investor Relations Institute survey conducted earlier this year.
In the AIRA survey, 67% said their blackout policy permits them to speak with analysts and fund managers in the lead up to the results announcement, but only about company strategy. However, 33% said they are not permitted to speak to analysts and fund managers during the blackout.
Email a key alerting tool
Email alerts and filings to the exchanges are key tools for Australasian companies to keep shareholders informed about company news. Paid PR wires, which dominate disclosure dissemination in North America and more recently Europe, have no disclosure stature in Australasia.
Fully, 91% of AIRA respondents said they offer email notifications to shareholders. Of this group, 73% said they distribute notifications within 1 hour of their announcement being released by the ASX. One-third distribute email notifications immediately after confirmation of ASX release.
There is no word on how many are using RSS or social media like Twitter for notifications, but our own research shows that Australian companies are lagging companies in other regions, especially US, Canadian, German Scandinavian, Brazilian and UK companies.
Social media influence increasing
This is the first year that AIRA’s survey included questions about members’ use of social media. Only 19% of the respondents said they have acted on or responded to information discovered in a social media channel.
However, 59% of respondents said they expect social media’s influence to increase and 41% expect no change in the influence of social media. None expected social media’s influence to decrease
When it comes to the web, AIRA members say they use Google Finance (23%), Yahoo! Finance (14%), and 9% say they use Hot Copper, an Australian investor forum.
Our own research indicates that some of the Australasian companies actively using social media for IR news include Reed Resources, Kingsgate Mining, Rio Tinto, Liberty Resources, Kingsrose Mining, and NZX Group.
It’s worth noting that Thomson Reuters is an increasingly big player in the Australian webcasting market, which is currently led by the innovative Board Room Radio service.
See the full AIRA release.