Over the last few years many things have changed in the world of investor relations.  Increased regulation, liability, the need for transparency and the expectation of real time information have seriously taxed publicly traded companies.

Bill 198, which places the liability for secondary market disclosure on directors, officers and spokespeople and the CSA’s MI 52-109, which requires  CEO/CFO certification of disclosure controls, have both impacted the IRO’s role. IR professionals must now balance their responsibility for investor communications and relations with the need to ensure that these same communications achieve compliance and don’t expose the company to risk.

Maintaining accurate records of who-did-what-when, along with maintaining key drafts of regulatory filings and press releases are important in aiding CEO/CFO quarterly certification.  These compliance efforts are also timely and typically require ongoing investments of time to manage accordingly.

Consequently the challenge for IROs is to communicate with key individuals (analysts, major shareholders, etc.) without getting bogged down in compliance/risk management administration.

For small cap and emerging companies the problem is further compounded. Typically the teams inside these companies are small and individuals wear many hats.  In these instances managing disclosure and compliance sometimes takes precedence over focusing on strategic objectives and increasing shareholder value – which is obviously not what anyone wants.

If you work in Investor Relations then you know the amount of time that can be wasted trying to make simple changes to your web site, sending out emails, or tracking down the correct version of a document for approval.  You’ve also probably thought about how much more effective you and your peers could be if you didn’t have to deal with so many manual administration tasks. The following guidelines suggest a number of areas where automation may speed efficiencies and help you focus on increasing shareholder value:

  • Gain complete control of your web site

Many companies still rely on outsourced web development companies to maintain their web site.  This means that when a change to their site is required, they must instruct the developer and then communicate back and forth during the approval process before a change can be completed.  This takes time than necessary and puts you at the mercy of the vendor (who in some cases has no idea of the regulatory pressure you are under to get these changes made).  To best solve this problem, select a web content management system (CMS) for your web site.  With minimal training this approach will give you the ability to directly make changes and updates to your site at any time without requiring technical assistance. When selecting a CMS, be sure to choose one that is recognized for managing corporate web sites and provides 24/7 support to ensure that you are never left out in the cold.  Look to your peers in the industry to see what other people are using.  By removing your reliance on external web maintenance, you’ll be able to make the changes on your site in the same time it used to take you to make the initial request.

  • Use data feeds to automatically update press releases on your web site

Probably the most frequent task of updating web site content is the posting of press releases.  Using a data feed for your press releases ensures that they are automatically posted to your web site within a couple of minutes of crossing the wire.  When selecting a data feed vendor, look for the ability to incorporate the feed seamlessly into your site, and to be able to use the headlines of the press releases in various areas throughout your site (depending on your site design). This will ensure that you have completely removed all of the manual tasks related to getting news onto your site

  • Use email alerts to send out key information automatically to your subscribers

Email is still the most widely accepted means of distributing breaking news.  To take advantage of this, be sure to offer a method to easily subscribe to email alerts on your web site.  These alerts should then be tied to all of your key content such as press releases, events, presentations, reports, etc.  This service removes the need for you to manage sending out updates via email, rather as content changes on your site (which you are now in control of) the email alerts are sent out automatically.

  • Combine data feeds and email alerts

To optimize the efficiency of your automated press release updates and email dissemination, combine these two efforts to eliminate all tasks related to posting press releases or sending them out.  Once in place, your only worry is to get the release to the wire – everything else happens automatically.

  • Leverage software to automate workflow & approvals

During the drafting and approval of press releases, regulatory filings or web content one of the biggest opportunities to save time is to use collaborative software to automate the management of workflow and approvals.  Rather than manually trying to track who has reviewed or approved what document/draft, there are now software options that manage all of this in the background – allowing you to focus on the content of your disclosure, rather than the process of managing it.

  • Remove the duplication of data entry for your subscriber list

Use your web site as your sole vehicle for subscribers to receive information. The goal in working with subscriber data is to only have this data entered once and preferably by the individual subscribing.  Some companies unnecessarily duplicate efforts by having subscribers complete a form on their web site which then requires a second entry by IR personnel into an internal system (Outlook or something similar). In some cases, they then provide this list to their newswire to blast press releases.  In the completion of this loop, this same data has been entered 3 separate times. If specific information requires updating, this has to happen in 3 locations. By using your web site as the prime vehicle (along with integrated email alerts) all of your data will be in one location and easily reported on and/or exported.

  • Use software to automate disclosure records management and reporting

With the increased compliance requirements of  Bill 198 and CSA’s MI 52-109 (certification of disclosure controls and procedures)  individuals involved in managing disclosure typically are required to maintain records of how controls and procedures are being executed (aka: who did what when).  Some companies try to maintain these records using email folders and printed copies of documents.  In these cases, should there be a regulatory or legal inquiry, significant effort is required to organize these manual records into a format that can be reported on.  By using software to manage the disclosure process, these records are generated automatically in the background and are easy to report on. This removes both the front end of creating the record and the back end of reporting on it.

  • Look for integrated systems that provide all of the above

Although there are options for selecting individual solutions that can be pieced together to achieve the above, the challenge is that this results in a customized solution based on different vendors.  Any time you need to design or maintain a custom solution, it typically takes time to design and maintain and creates difficulties should you wish to change something down the road. Instead look for solutions that provide everything you need in one system, or look for vendors who have established partnerships and have integrated everything you need in one seamless solution.

Using the above tactics we have witnessed 50% to 60% efficiency gains in a typical organization. Along with this increase in efficiency, the issuer also experiences a reduction in risk through the detailed record of the disclosure process (controls and procedures). This reduces the effort associated to certification while also providing data of exactly how a process functions (who did what when) which enables the company to look for further opportunities to improve efficiencies and bridge gaps.

Automation through software should not be viewed as a luxury that only large companies can afford. The reality is that both small and large companies can benefit tremendously by reducing more than 50% of the time required to manage disclosure and reduce disclosure risk. This same time can be directly invested in strategic efforts that help increase shareholder value.

Darrell Heaps is the Co-founder, President and CEO of Q4 Web Systems a leading provider of on-demand disclosure risk management software.  Q4’s solutions help publicly-traded companies increase efficiency, reduce compliance risk and gain complete in-house control over their disclosure. Q4’s innovative solutions automate many of the manual tasks related to disclosure, saving issuers time and money while speeding the delivery of their material information to the market. Companies across North America rely on Q4 Web Systems to manage their disclosure more efficiently, more effectively and with less risk. Learn more at Q4 Inc.

Since 2005 ITB Solutions has provided listings development services to stock Exchanges in Canada such as the Canadian Securities Exchange.  ITB Solutions currently provides New Listing Services to the NEO Exchange.  We assist companies with the listing application and managing the process to become publicly tradable in Canada, as well as offering advice on how to make the most of your public listing.  You can reach Jeffrey Stanger at 647-500-0492 or by email at jeffrey@itbsolutions.ca