Investor Relations

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IMPLEMENTING BEST PRACTICES IN INVESTOR RELATIONS 81At the end of this process, the issuer obtains a file including the nameand address of all identified shareholders, be they corporations or individuals,along with the number of shares owned. While unique in its kind, theinformation contained in this file must be expanded through other searches,possibly via the acquisition of specialized databases.3.1.1.3 Analysis of voting resultsThis type of analysis is much more varied and the findings depend, in largepart, on the thresholds and means of convening shareholder meetings, asoutlined in section 2.5.2.2. The proxy ballot cards sent by mail or broughtin person by shareholders attending the annual general meeting (AGM)are legally the property of the company. To perform the analysis, theseare captured and stored into a well-customized Investor Relations contactdatabase and provide additional information about or confirm the identityof the shareholders identified by the issuer during the process describedabove.The exercise is also very helpful when it comes to planning the annualmeeting for the following year: You will want to compare the number ofprinted proxy ballots versus the number of shareholders who returned themand those who actually came to attend the AGM. Useful cross-analysisshould also be conducted to do the following:Calculating the average number of shares held by retail investors,valuable information if the issuer plans a capital increase and wants toestimate the subscription rate for this category of shareholder;Assessing the sensitivity of individual and institutional shareholders todifferent kinds of resolution based on how they vote;Adjusting the size, and consequently, the budget of the event to actualpresence of shareholders.3.1.2 Technical Means3.1.2.1 Free shareholder identification techniques Questionnaires (see Resources). Issuers may, for example, handout short questionnaires after earnings presentations or roadshows to findout their audience’s impressions of the meeting and whether or not they areshareholders. Resourcefulness. There is nothing to prevent Investor RelationsOfficers (IROs) from directly asking institutional or retail investors they
82INVESTOR RELATIONStalk with whether they own shares in the company, and if so, how many.Even if no specific answer is given, the question will rarely be dismissedoutright. This can, in fact, be a valuable opportunity to discover what itwould take to convince those who do not already own shares to invest: Ashift in strategy? Lower valuation multiples? Any information thus gatheredshould be shared with company management.3.1.2.2 Fee-based identification tools Standard mailing techniques. When a contact database alreadyexists, there is no reason why issuers cannot rely on traditional investigationand marketing methods. For instance, they may send out questionnaires,anonymous if so desired, including questions about the number of sharesowned. It is wise to plan this type of undertaking well in advance and toinform the relevant authorities in the country in question, ahead of time, ofany plans to create a contact data base that will be used to this end. Databases. There are numerous databases that list internationalinstitutional investors and provide a breakdown of their portfolios by geography,size, and nature of the holdings, investment policy, and so on. Insome countries, institutional investors must disclose the content of certainportfolios such as the mutual funds, unit trusts, and collective investmentvehicles they manage on an annual, half-yearly, or quarterly basis. Manysuch databases are public information. They can also be developed specificallyfor issuers. Information is given about the number of shares held,changes made to the portfolio since the previous reporting period, the nameand contact information of the fund manager, the buy-side analyst coveringthe country in which the shares are issued, specifically the one in chargeof the sector in which the issuer is active. Moreover, databases also mentionthe rival companies in which shares are owned, the amount of fundsunder management, and a breakdown between domestic and foreign investments(this gives an indication of how familiar foreign investors are with thestock exchanges and economies of other countries). Issuers can only justifyinvesting in this type of Investor Relations tools if they are targeting newinstitutional shareholders.3.1.2.3 Financial intermediariesFinancial intermediaries have privileged access to knowledge about listedcompanies’ shareholder bases: Investment banks and brokers. Through the transactions theyexecute for institutional clients and retail investors, these intermediaries can
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INVESTOR RELATIONS
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Investor RelationsPrinciples and In
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ContentsList of IllustrationsIntrod
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CONTENTSvii3.3 Understanding Market
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CONTENTSix4 Measuring The Value Of
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IntroductionAll things being equal,
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INTRODUCTIONxiiion the primary mark
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CHAPTER 1Competing forCapitalBringi
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COMPETING FOR CAPITAL 3FoundersShar
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COMPETING FOR CAPITAL 5attract and
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COMPETING FOR CAPITAL 7OfferDemandS
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COMPETING FOR CAPITAL 9are robust e
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COMPETING FOR CAPITAL 11 Develop an
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COMPETING FOR CAPITAL 13image long
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COMPETING FOR CAPITAL 15ensure that
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COMPETING FOR CAPITAL 17The company
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COMPETING FOR CAPITAL 19will benefi
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COMPETING FOR CAPITAL 21Because deb
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COMPETING FOR CAPITAL 23Pre-IPOEsta
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SEVEN KEYS TO SUCCESSFUL INVESTOR R
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IMPLEMENTING BEST PRACTICES IN INVE
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MEASURING THE VALUE OF INVESTOR REL
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Resources6.1 The CEO Investor Relat
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RESOURCES 1736.3 Earnings Presentat
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RESOURCES 175Today’s investor day
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RESOURCES 1776.5 Investor Relations
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RESOURCES 179Your commitment to sen
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D-7 Audit committee meetingFinal ro
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Indexaccounting standards, 35, 57,
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INDEX 185disclosure, 2, 9, 11, 44,
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INDEX 187investor relations - conti
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INDEX 189risk, 4, 6, 38, 54, 72, 87
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