AT THE IR Society’s prestigious IR Best Practice Awards in London last night, German chemical company BASF SE (ETR:BAS, PINK:BASFY) walked away the big winner with four awards – 3.5 of which were for its online IR communications.
The company won IR Best Practice Awards for:
- Best use of a website to communicate and support a company’s investment proposition;
- Most effective use of innovative online technology to support IR communications;
- Best practice website in the international category; and,
- Most effective annual report, printed and online, in the international category (which is where the 0.5 of an award for online comes from).
I’m not privy to what the judges liked most about BASF’s online IR communications, but it doesn’t matter because there’s a lot to like. BASF has long been a leader in online IR communications and is often a source of ideas and inspiration in our reports and IR website audits.
Here are five things that for me separate BASF from the crowd:
1. Recognizing that not everyone knows the story
The biggest mistake most companies make on their IR websites is forgetting that there are two major audiences for IR information: those who already know the company, and those that don’t. IR departments are often so busy dealing with those who know them – analysts and current shareholders – that they frequently ignore potential investors, which typically is their biggest audience.
BASF doesn’t make this mistake. In fact, it was one of the first companies to hit on the idea of setting aside dedicated sections on its IR website to explain to prospective investors what the company does and how it delivers value to shareholders.
The first two sections of the site are:
- BASF at a Glance, which has eight subsections that briefly explain the company’s business; and,
- Strategy, which has seven subsections and seven sub-subsections that delve into BASF’s business strategy.
The thinking here is that a prospective investor doesn’t have to go digging through annual reports, fact books, regulatory filings, and investor presentations to unearth the basic information they need to decide if they’re even interested in the company. It’s all there at the top level of the site, and if this piques their interest, they can go deeper and start doing some serious research by viewing or downloading the company’s core disclosure documents, which are all there in reams.
Of course, summary information that supports the investment proposition is also important to current investors. Not only do they like to see that their company is beating the bushes for new investors, but it also can remind them why they hold the company’s securities and should continue doing so.
2. Outstanding online quarterly reporting
There are so many moving parts to BASF’s regular quarterly reporting that it’s hard to know where to start. Like many European mega-caps, reporting duties are split between the media and the capital markets, which probably makes things seem more complicated than they actually are. Still, it’s amazing what they are able to accomplish each quarter when most companies struggle to make even half the effort once per year.
Here is just some of what you would have received as an investor in the last quarter – Q3 2010:
- A full HTML quarterly report with clean financial statement tables that link to the respective notes and can be downloaded in Excel, or compared to the same quarter in the prior year in a single click. Very few companies do that annually, never mind quarterly as BASF does. Of course, the same information is available to be downloaded in Excel and PDF, which many analysts prefer on the actual release day. However, when they need to quickly refer back to the report a few days or weeks later, the HTML report is the quickest and easiest way for them to get what they want. HTML also is overwhelmingly preferred by non-professionals who want to be able to quickly browse and skim through the report for the information that most interests them.
- A standard quarterly earnings webcast, also available as a podcast, via Thomson Reuters. This is one thing that they don’t do as well as I’d like, but they make up for it by providing a lot of supplementary material so that you don’t actually have to use the webcast. There’s a transcript of the conference call Q&A, the prepared remarks, presentation slides used on the call, a fact sheet, and a separate video interview with CEO Dr. Jürgen Hambrecht.
- A little-known aspect of BASF’s quarterly reporting is the quarterly IR magazine, which arrives via email the day after the results. This is designed for retail shareholders who may have missed the live reporting events the day before. It includes links to all the key resources as well as updates on other topics. It’s a handy reference even if you do follow the quarterly reporting event closely.
- Social media have become an integral part of BASF’s quarterly reporting. As I reported earlier this month, they’re achieving good results on their BASF_IR Twitter account. Facebook plays a lesser role, but quarterly results are referenced. They also are using SlideShare for their earnings and other presentations.
This isn’t everything they do, but there’s no point going on about it because they deserve the award for just doing the bit in the first bullet point.
3. Lots of ways to stay in touch
If you’re an analyst, investor or shareholder in BASF there’s no shortage of ways to stay informed about ongoing developments at the company. There’s the usual email alert utility, which I enjoy getting because of the “Dear Mr. Jones” salutation that makes me feel important.
If you’re on the go and want to access BASF’s IR site, there’s a basic mobile version, while the events calendar includes email alerts and the ability to download events into a desktop or online calendar (no live calendar updates, unfortunately).
They have two RSS feeds. One is for investor news releases and the other is a change log that notifies you when new information is posted on the site, such as new analysts consensus estimates or when a new presentation becomes available. This second feed is something we highly recommend, especially for companies that want to use their websites for disclosure information. When properly implemented, a change log can provide a reliable record of when particular disclosure information became available on the site.
Twitter has quickly become one of the best ways to stay informed about the goings on at the company. As I already mentioned, they use Twitter exceptionally well.
4. A shareholder meeting that actually matters
Just about every company in the world could learn a lot from BASF about how to run the online component of an annual shareholder’s meeting. While many companies treat their shareholder meetings as formalities they are required to endure, BASF’s approach makes it clear that this is a company that views its meeting as a major opportunity to reconnect with and listen to its shareowners.
Annual Meeting is a main section of the IR website. The amount of planning and attention to detail that goes into presenting each meeting on the web is remarkable. Go there now and you’ll see that they’re already promoting the next meeting, which is still six months away. All the materials for each meeting over the past 8 years are neatly archived and easily accessible.
However, you can’t really judge how well they handle their annual meetings online until you experience the elaborate lead up, the action on the day, and the careful follow up after the event. While much is made of how companies stack up against various governance checklists, BASF has shown me over the years that making a big deal of the annual meeting on the web can be a highly effective way to demonstrate through actions rather than just words that a company actually has a high regard for the role of its shareowners.
5. A dedicated IR website manager
BASF has a large IR department. The IR contacts page, which itself is rather good, lists 14 individuals on the staff. Among the group is Andrea Wentscher, who has primary responsibility for the IR website and also is the IR manager in charge of retail investor relations.
It amazes me that so few companies have dedicated IR website managers, particularly large US companies. There’s more than enough work and responsibility to justify the position. And given how much emphasis regulators have placed on company websites as disclosure channels, you’d think that creating such a post would be seen as valuable insurance against compliance risks.
Compliance aside, the rapid rise of social media as a way for people to communicate and connect, coupled with the growing complexity of web technologies, provides ample reason for IR departments to have their on web manager roles, either internally or outsourced. It’s impossible to be effective without them.
And a bonus 6th
Few companies come close to doing what BASF does on its IR website. But perhaps the most amazing thing is that BASF doesn’t just do it once. It does it twice. The full site is available in German as well.