According to the above survey more than 84% consider Bloomberg and Reuters to be of key importance in IR communication; is it similar in Poland or do the local media better reach financial circles? According to the Polish National Investor Survey current and interim reports are the most valuable source of information.
I think this depends on the group. Certainly for both institutional as well as individual investors the fundamental source of information are and should be current and interim reports. Certainly information agencies such as Bloomberg or Reuters are a vital source of information due to their nature. Highest quality of information delivered in a possibly fast way. On the one hand this is an advantage over traditional printed media, which act with a delay, and over websites, which still have a lot of potential in terms of quality. It has been known for some time that Bloomberg and Reuters teams are held accountable to the second as to who gave the information first. Hardly surprising therefore what institutional investors say. Let us remember however that individual investors do not always have access to paid services such as Bloomberg and Reuters and they use other sources. One of the three most important ones are investor relations tabs on the issuers’ websites. It is enough to make even a cursory analysis of the websites of Polish issuers to see how much remains to be done. Next to very good websites, which provide valuable information, there are also such that are not updated for years and look like someone’s punishment. What can a potential investor, even an institutional one, think about such a company? He will apply a discount, even subconsciously, because if the company doesn’t care about its online presentation, then there are bound to be many more such weak points. A good website and investor relations service is the ABC of today. In terms of investor relations it is a bit like skipping lessons in multiplication tables, but being active in class when integrals are being explained. Without a solid website there are no good investor relations.
In the increasingly faster and fuller circulation of information it gets harder and harder separate investor communication from traditional PR. Although both teams are responsible for promoting the company, they seldom cooperate – what is the recipe for harmonious cooperation? Is it different in small, medium and large companies?
I remember that when I began working in investor relations there was a clear split into communication to financial media and investor relations. I also have the impression that some “experts” still wrongly think investor relations are the same as communication by means of financial media. I personally am of the view that you should not and never should have separated the two. They are naturally complementary. It is just as much a mistake to omit financial media in communication, as it is in basing communication strategy only on them. I think that owing to their history many PR and IR agencies have a problem with stepping out of their box and taking a broader view of communication. It is similar with some listed companies. Some still treat the media as the main component of their strategy, while other focus on direct relations with investors. If we add a new instrument to this “brew”, such as interactive services or the aforementioned social media, then you could probably recruit three or four consultants to do investor relations properly. I think that our market – though being shallow, or maybe mainly because of this – will move towards consolidating various competencies. I am not actually thinking about equity consolidation. In my opinion only such an approach will ensure maximum efficiency of investor relations both in terms of costs as well as competence. TAILORS Group in fact stands on this assumption. We see that public companies seek synergies and understanding. This saves time and money. It is better to have a one-stop shop to take care of proper relations with investors and media or to prepare corporate communication. A narrow niche has its advantages, but there are more downsides to it in my view.
Finally let us dwell on what will come. The Millennium generation – materialists, egoists living partly in a virtual world. A new generation of investors is becoming of age – will it determine a completely new approach to the management of relations with this community – will the role of digital and interactive solutions grow, or maybe fully personalised content? What is your view on it?
I think the fundamentals will remain the same. It is a good idea to look into the books of Benjamin Graham, the father of fundamental analysis. Today you can only too clearly the many analogies to what happened several decades ago, reading “The Intelligent Investor”. Speculative bubbles continue to swell and to burst. Money must be on the move and certain things will never change, though they do look different at first sight. I think this derives from the structure of man and his nature. In this context it is worth remembering this when conducting investor relations. It is however also good to bear in mind what you mentioned. We are part of the technology revolution and investor relations, being a part of life, are also affected. Today technology gives us great opportunities, which really should, indeed must be used in communication. Thanks to the internet and mobile technologies waiting for information has been shortened to a minimum. On the other hand this has caused information noise to appear, which we had never encountered before. Our perception is ceasing to embrace all this. We often have a problem trying to identify what is important and what isn’t, what is a fact and what is only gossip. And this actually has considerable influence on decisions – also investment ones. Effective use of technology, bearing the aforementioned fundamentals in mind, is in my mind the future of investor relations, also in the context of new generations of investors looking at the world quite differently than a few years or a few decades back. It is however worth remembering that investors are a group, which cherishes tradition. They still prefer direct contact with the directors of their companies (although here paradoxically Graham did not like this form of communication and it was modified only later by Warren Buffet – his student). It makes sense to note that power point and excel still rule, though new tools are also appearing, such as interactive DataBooks, interactive online reports, effective use of animation or video in presentations. This brings almost unlimited ways to structure the information noise and to extract what is really important. I think it is a good idea to look at these tools now in order not to be left behind when they become part and parcel of daily relations with investors.
Lukasz Wojcik – Banking and finance graduate of the Warsaw School of Economics. Passionate about the capital markets and an active investor. Completed advanced training and courses in finance, enterprise valuation and investor relations. Specializes in investor relations and corporate communications. In 2005–2013 a shareholder and management board member of Poland’s largest financial PR agency. Previously a journalist at Parkiet. He has coordinated and implemented projects for such clients as Cyfrowy Polsat, Multimedia Polska, PKP Cargo, Ronson, Tauron Polska Energia, and many more.