PHEW! Awards season is finally over. It seems that over the past few weeks we’ve been inundated with investor relations awards. And more keep popping up each year.
What gives with all the IR awards? Do investor relations professionals suffer from some sort of inferiority complex or something that they long for a pat on the back?
Well, if you’ve recently won an award – especially one for your IR website or broader online investor relations communications – let me be the first to break this to you gently. You might not deserve that hunk of metal, glass or framed certificate. In fact, there’s a good chance that the award you won should have gone to someone else.
But we don’t know for sure because most of these awards are not objective tests of effectiveness and not nearly as transparent as they should be. They’re often unabashed popularity contests – like the IR Magazine or Thomson Extel awards.
Or they are biased “expert” reviews, sometimes by people with a vested interest in the outcomes, such as the IR Global Rankings or the Webrankings, which are run by firms that actually build IR websites and sell IR services that conveniently meet the checklist of items they look for in their reviews. No wonder their clients do so well.
Of the two kinds of awards – popularity contests and expert reviews – I think the expert reviews are more bogus than the popularity polls, but they’re both bad. At least with popularity contests the results are based on numbers of people voting for their favorite companies.
With expert reviews, it’s totally subjective and based on what a few people with super-sized opinions (like me) think is good. I guess you could argue that asking a few analysts what they think is not much different, but they’re analysts so we worship at their altar.
So what’s the solution? Well, I have a few ideas when it comes to awards for online investor relations. And they’re really quite simple.
Show me your strategy, your budget, and your results
First, let’s recognize that anything you do on the web can and should be measured. We don’t need experts or analysts to tell us what’s good, we can look at the web traffic data and it will tell us.
It’s total nonsense – especially in a field like investor relations that is so much about numbers and analysis — that we give awards to companies for Best IR Website and never ask how much they grew their traffic over the past year. Or how much it cost them to get that additional traffic.
Instead, we give them awards because they did something “cool” that analysts remember when they’re interviewed by the IR Magazine survey squad, or because they dutifully implemented every last item on the experts’ checklist.
No, if we really want to recognize truly outstanding online investor relations communications we need to see the numbers. If PR people have to do this, why not IR people?
IR departments, if they want to win awards, should be required to complete an entry that:
1.) Explains their strategy and plan. What was the challenge they were trying to address? What were the targeted outcomes, and how did they go about achieving them?
2.) Provides the results, including the raw data. The data is there, give it to us. Let us see how well things worked out. Did they achieve the 20% increase in earnings call attendance, the 40% increase in visitor time spent on the annual report, the 1,000 additional email list sign ups, or the 10-point narrowing of their forward PE versus a peer group? Show us the numbers, you’re IROs after all.
3.) Gives the budget. The results have to be viewed in context of how much the company spent to achieve them. Only when we know this can we truly appreciate how good the plan and execution was.
With this information, everyone can compete on a fairer playing field. Someone will still have to choose the winners, and that’s likely to be somewhat subjective, but it will be much harder to dismiss truly outstanding execution and strategy.
With this kind of process, the entries themselves will provide outstanding case studies for the profession to learn from. Small companies with negligible budgets but great ideas and enterprising IROs will get the recognition they deserve. Big companies with big staffs, big budgets and even bigger results will also win.
There are many in the IR community who don’t check the boxes on the experts’ checklists because they can’t afford to, or because the checklist is irrelevant to them. There are even more who no one recalls when the survey people call.
These people aren’t being recognized because existing awards programs aren’t focused on what really matters.
Dominic (bio & disclosures) is IR Web Report‘s founder and an online investor relations consultant. He advises leading public companies and investor relations service providers worldwide on using the web for disclosure, engagement and profile building. You can contact him via the contacts page.
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