Tab 100 Investor Relations - A Primary Corporate Function
¶101 Key Points
¶110 Objectives and Benefits of Investor Relations
¶111 Combining IR and Corporate Communications
¶112 Corporate Governance and Investor Relations
¶120 New Directions for the IRO
¶121 Valuable IR Skills
Communication Skills are Essential
¶122 Qualities and Prerequisites of IR Pros
¶123 The Art of Persuasion
Checklist: Fundamental IR Skills and Qualities
¶124 Enthusiasm is Contagious
¶125 Prioritizing Activities
¶130 Linking IR to Key Functions
¶131 The Link to Strategic Planning
¶132 Working Closely with Operational Management
¶133 Partnering with Management on a Strategic IR Program
Checklist: The IRO and Accurate Valuation
¶134 Applying Marketing Techniques
¶135 Developing a Full Disclosure Plan
¶136 Market Feedback -- Educating Corporate Management and Personnel
¶137 Disclosure -- the Legal Process and the Corporate Secretary
¶138 Building Credibility
¶140 IR Roles Within the Investment Community
Checklist: Investor Information Sources
¶141 Influencing Investment Decisions
¶142 Managing Market Expectations
¶143 Building Relationships
¶150 Creating Fair Stock Value
¶160 Reducing Capital Costs
¶170 Educational Opportunities
Tab 200 Securities Market
¶201 Key Points
¶210 Investment Climate
¶220 Structure of the Securities Market
¶221 Regulatory Framework
Figure ¶221.1 -- Key Laws Affecting Investor Relations
¶222 Role of the Exchanges and Nasdaq
¶223 The Sell-Side
Largest Owners of Equity Assets
¶224 The Buy-Side
¶230 Focus on Market Indicators
Figure ¶230.1 The Most Common Stock Indexing Resources
¶240 Always an Uncertain Future
¶250 The Internet is Changing the Marketplace
¶251 The Rise of ECNs and the Standardization of Online Trading
¶260 The Impact of Extended Trading Hours on Investor Relations
¶261 Real Time Trading and Pricing Information
¶262 Investor Protection and Education
¶263 Impact on Market Players and IR
Tab 300 Analyzing the Investment Process
¶301 Key Points
¶310 Mastering the Market
¶311 Getting Inside the Investment Process
¶312 How Investors Look at a Company
¶320 The Market Sets Prices
¶321 Portfolio Turnover Varies
Detecting Short-Term Inefficiencies
¶322 Theory of Relativity
¶330 How Managers Measure Performance
Measuring Risk
¶340 How Institutions Are Structured
Composition of Large Investment Firms
¶350 Key Sources of Information
¶351 Data Sources and Consultants
¶360 Investment & Management Styles — Active v. Passive
¶361 Investment Styles and Financial Models
¶362 Companies and IR Are a Vital Source
¶363 Understanding Investment Drivers
¶370 Hedge Funds
Hedge Fund Resources
Tab 400 Organizing the Investor Relations Function
¶401 Key Points
¶410 It's All About Information
¶411 Information as Fundamental Investor Relations Building Block
¶412 Information Basic to Fundamental Analysis
Information Drivers
¶413 Fundamental Financial Information
Checklist: Sources of Financial Information
¶420 Understanding Financial Statements
¶421 Ratios and Returns
¶430 Operating Information
¶431 Qualitative Factors
¶432 Use of Qualitative Information Is Growing
Figure ¶432.1 Evaluating Non-Financial Factors
Figure ¶432.2 Top 10 Investment Measures
¶433 Trade Associations Review Financial Reporting
¶434 Competitive Strengths and Value Drivers
¶440 Information Sources and Delivery Channels
¶441 The Role of Investor Relations Consultants
How to Identify IR Consultancies
¶450 Organizing the Investor Relations Function
¶451 The IR Program Evaluator
¶451.1 Identifying Fundamental Activities
Checklist: Basic IR Activities
¶451.2 Strategic Investor Relations Activities -- Adding Value
Checklist: A Framework for Value-Added Activities
¶451.3 Implementing the Investor Relations Program
Figure ¶451.3 Evaluating Fundamental IR Activities
¶451.4 Analytical Tool to Set IR Priority
¶460 Evaluating the Practice
Favorable Forces Elevating IR Practice
Tab 500 Disclosure
¶501 Key Points
¶505 The Changing Disclosure Landscape
¶510 The Essentials of Disclosure
¶511 Advantages of an Organized Disclosure Practice
Disclosure Practice Case Study — Expeditors International
Checklist: Benefits of Voluntary Disclosure
¶520 Legal Framework of Disclosure Requirements
10K Content Requirements
8-K Filing Requirements
Checklist: Definitions of an Accelerated Filer
¶521 Focus on 'Unstructured' Disclosure
¶522 'Differential' Disclosure
¶523 Defining Material Information
¶524 Handling Material Information as an Insider
IR Officers as "Insiders"
¶530 How to Meet Disclosure Requirements
¶531 Ensuring Compliance with Material Disclosure
Procedure to Comply with Item 12 of 8-k, Reg G and Reg FD
Case Study — Flowserve
¶532 Handling Rumors and Timing Announcements
Checklist: Disclosure Guidelines
¶540 Constructing a Disclosure Policy
¶550 Laws Provide Safe Harbor Protection
Three Keys to the Safe Harbor Test
¶551 Efforts to Curb Lawsuits
¶552 Good Examples of Safe Harbor Language
Sample Cautionary Language on the Web
Exhibits
500.1 (pdf)
500.2 (pdf)
500.3 (pdf)
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Tab 600 Managing Expectations
¶601 Key Points
¶610 The Driving Force of Investments
¶611 Measuring A Company's True Strength
¶620 Institutions -- The First Step of Managing Expectations
Gauging Market Feedback
Figure 620.1 — Comparing the Sell-Side vs. the Buy-Side
¶621 The Appeal of Certain Models
¶630 How Earnings Impact the Market
¶640 Playing the 'Earnings Management' Game
2003 — A Year of Scandals, Conflicts of Interest, Changing Practices
¶650 The Debate Over Giving Guidance
¶651 Protection Against 'Whisper' Numbers
¶652 An Historic Perspective
Checklist: Four Guidelines for Working With Analysts
¶660 Strengthening the Role of Audit Committees
Checklist: Audit Committee Requirements
¶661 Key Accounting Practices Under SEC Microscope
¶662 SEC Brings Cases Against Companies
¶663 Strengthening the Role of Audit Committees
¶670 Understanding the Focus on Earnings
¶671 Reviewing the SEC's Regulation Fair Disclosure
¶672 Impact of Regulation FD
¶673 Changing Role of Analysts
¶674 Proposal for Real-Time Financial Reporting
Tab 700 Valuation
¶ 701 Key Points
¶ 710 Advantages of Using Valuation
¶ 720 The Fundamental Building Blocks of Valuation
¶ 721 Price/Earnings (P/E) Ratio and Price/Sales Ratio (PSR)
¶ 722 Price/Book (P/B) Ratio
¶ 723 Price/Cash Flow (P/CF) Ratio
¶ 724 Price/Earnings to Growth (PEG) Ratio
¶ 725 Discounted Cash Flow (DCF)
¶ 726 Dividend Discount Model (DDM)
¶ 727 Return on Invested Capital (ROIC)
¶ 728 Cash Flow Return on Investment (CFROI)
¶ 729 Economic Value Added (EVATM)
¶ 730 Comparables
¶ 740 Intangibles
¶ 750 Impediments
¶ 760 Applying Appropriate Measures Inside the Company
¶ 770 World Class Investor Relations
Exhibits
700.1 (pdf)
700.2 (pdf)
700.3 (pdf)
700.4 (pdf)
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Tab 800 Building Relations with the Sell-Side
¶801 Key Points
¶810 Functions of Sell-Side Research
How Institutions Use Sell-Side Research
¶811 Modifying the Traditional Focus on the Sell-Side
¶820 The Sell-Side Analyst Universe
Checklist: Tips on Building Sell-Side Relationships
¶830 Resources to Target Analysts
¶831 The Changing Analyst Landscape
¶832 Rating the Analysts
¶835 Post Conflict of Interest Environment -- Big Changes in Behavior
¶840 Starting a Contact Program
Checklist: How to Target Sell-Side Analysts
¶841 Information is the Key Ingredient
Tab 900 Building Relations with the Buy-Side
¶901 Key Points
¶910 Institutions Are a Company's Prime Audience
¶920 An Institutional Market Profile
Largest Institutions, Leading Index Firms, Companies’ Largest Institutional Positions
Investing Methods of Institutions
¶930 Institutions Impact Stock Prices
¶931 The Link Between Investing Style and Portfolio Turnover
Institution Portfolio Turnover Rating
¶940 Programs Aimed at Institutions
¶941 Building a Foundation of Sell-Side Coverage
¶942 Communicating with the Market
¶943 The Value of Meetings and Presentation
¶944 Choosing Conferences
On the Road: How IROs Do It
The BIG Meeting
¶945 Information Needs of Institutions
¶950 Understanding Institution Investing Styles
Elevating IR’s Role
Checklist: Research and Analysis
¶951 Five Originators of Ownership Information
¶952 Primary Information and Its Major Uses
Five Groups of Available Data and Services
¶953 Profiles of Major Providers
Spotlight: FactSet Covers LionShares of Investment Information
Spotlight: Computershare’s IRtrack
¶954 Value-Added Platform Providers
¶954-1 Other Major Resources
¶960 A Primer on Institutional Targeting
Six Benefits of Targeting to IR
¶961 The Role of Targeting in Strategic Decision Making
¶962 The Anatomy of a Targeting Program
¶963 Looking for Compatible Institutions
Targeting Filters
¶964 Quantitatively Analyzing Institutions' Use of Models
¶965 Consulting Firms Offer Similar Services
¶966 Conducting a Perception Study
¶967 Finding Smaller Money Managers
¶967.1 Creating More Value
¶970 Developing a Core Competency in Share Price Improvement
¶971 Case in Point -- A Case History
¶972 Creating Intimacy in the Relationships
Checklist: Building Relationships with Institutional Managers and Analysts
Exhibits
900.1 (pdf)
900.2 (pdf)
900.3 (pdf)
900.4 (pdf)
900.5 (pdf)
900.6 (pdf)
900.7 (pdf)
900.8 (pdf)
900.9 (pdf)
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Tab 1000 Individual Investors
¶1001 Key Points
¶1010 Reaching Individual Investors -- Prioritize Your Goals and Resources
¶1011 Market Capitalization
¶1012 Assessing Opportunities
How Individual investors Access Data
¶1013 Motives for Investing
¶1014 Impact of Individual Investors
¶1020 Gathering Information/Documenting Results
¶1030 Attracting and Retaining the Right Individuals
Checklist: Eight Good Reasons to Pursue Individual Investors
¶1031 The Attraction of Effective Communications
Investor Communications Channels
¶1032 Appealing to "Affinity" Investors
¶1033 The Value of DRIPs and DSPPs
Some of the Firms Offering Direct Stock Purchase Plans
¶1034 Employees as an Affinity Group
¶1035 Appealing to Customers
¶1036 Reaching Other Vital Affinity Groups
¶1040 Writing the Universal Annual Report
¶1050 More Delivery Channels
¶1051 Marketing to Individuals Through Investor Clubs
Better Investings' Annual List of Most Popular Stocks
¶1052 Media Opportunities to Reach Individuals
¶1053 Reaching Individuals Through Brokers
Tab 1100 Governance
¶1101 Key Points
¶1110 Trends in Governance
¶1120 The Link Between Corporate Governance and Value
Governance and Shareholder Rights
¶1130 Governance Model
¶1140 Transparency and Disclosure
¶1150 Compensation -- A Critical Prime Mover
¶1160 Global Impacts
¶1170 Organizations and Resources
Exhibits
1100.1 (pdf)
1100.2 (pdf)
1100.3 (pdf)
1100.4 (pdf)
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Tab 1200 Market Research
¶1201 Key Points
¶1210 Survey Research
¶1211 How Survey Research is Used
¶1211.1 Defining Target Audience
Important Survey Research Findings
¶1211.2 Determining Themes and Messages
Checklist: How to Obtain External Views
¶1211.3 Designing the Media Mix
List of IR Communications Vehicles
¶1211.4 Measuring Change Over Time
¶1212 Methods Employed to Conduct Survey Research
¶1212.1 Means of Gathering Data
Pros and Cons of Mail Surveys
¶1212.2 The Role of the Questionnaire
¶1212.3 Sampling
¶1212.4 Quantifying Results
Table 1212.4: Perceived Strengths of Company XYZ
¶1212.5 Reporting and Interpreting Data
¶1212.6 Timing and Costs
Tab 1300 Technology/Web Sites/Conference Calls
¶1301 Key Points
¶1310 Building a Technology Platform
¶1311 Major Uses of Technology
¶1312 IR Management Platforms
¶1313 Distributing News Releases
¶1320 Investor Relations Web Sites
Quick Reference to Service Providers
¶1321 Webcasting Conference Calls
¶1325 Monitoring Chat Rooms and Message Boards
¶1326 Profiles of Major Providers
¶1330 Developing an IR Web Site
¶1331 Building the Web Site
¶1331.1 Touring the World of IR Sites
www.intc.com
www.coopercos.com
¶1331.2 Expert Advice
¶1340 The Medium of Choice -- Conference Calls
¶1341 How Conference Calls Gained the Spotlight
¶1342 The New Reality -- Including the Media
¶1345 Preparing for Conference Calls
¶1346 Conference Calling Technology
¶1347 Teleconference Call Service Providers
¶1350 The Growing Role of IR Providers
¶1351 Market Intelligence
¶1352 Support for Corporate Governance
¶1355 IR Provider Universe -- Updating the Players
Tab 1400 Annual Reports and Other Printed Material
¶1401 Key Points
¶1410 A Word About the Communications Process
¶1420 The Role of the Annual Report
Checklist: Annual Report Guidelines
¶1421 Creating a Great Shareholder Letter
¶1430 Content and Ideas to Consider
¶1431 The Changing Corporate Governance Framework
¶1432 Strengthening the Content of the MD&A
¶1440 Planning the Report
¶1450 Managing the Report
Checklist: Other Helpful Hints
¶1455 Producing Online Annual Reports
¶1460 More Timely Interim Reporting
¶1465 Press Releases -- The Leading Information Source
¶1470 Key Source: Proxy Statements
¶1480 Investment Profiles Are Selling Tools
¶1490 Reasons to Create Fact Books
Exhibits
1400.1 (pdf)
1400.2 (pdf)
1400.3 (pdf)
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Tab 1500 Media Relations/Crisis Management
¶1501 Key Points
¶1510 The Value of Media Coverage to Investor Relations
¶1511 A Media Relations Specialist Is Essential
¶1512 Media's Impact on Reputation and Valuation
Media Targets Investments
¶1520 Creating a Media Relations Program
¶1521 Building the Right Mindset
¶1522 Becoming a Student of the Media
Checklist: Create a Positive Media Relations Program
¶1523 The Media Relations Planning Process
Steer Clear of Exclusives on Material News
¶1524 Target Media for Best Results
¶1525 Available Media Outlets
Finding the Right Media Outlet
Checklist: Ideas to Strengthen Media Relations
¶1530 Using Advertising to Reach Investors
¶1540 Measuring Media Programs
¶1550 Crisis Communication Management
Media Targets Crises
¶1551 Developing a Crisis Communications Plan
¶1552 Key Components of the Crisis Plan
¶1553 Practice Execution
Checklist: Successful Management of Crisis Situations
Tab 1600 IPOs/Small Cap/Global IR
¶1601 Key Points -- IPOs and Turnarounds
¶1610 Effective Investor Relations for IPOs and Turnarounds
¶1611 Turning Around or Turned Around?
¶1612 Before the IPO
Anonymous Post-Roadshow Survey
Good Habits to Adopt
¶1613 At the Time of the IPO
¶1614 After the IPO
¶1615 Writing News and Earnings Releases
¶1620 Key Points -- Effective IR for Small-Cap Companies
¶1621 What Investors Want
¶1630 Key Points -- Effective Domestic and Global Investor Relations
¶1631 Investor Relations Outside the U.S.
Exhibits
1600.1
1600.2
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Tab 1700 Shareholder Services
¶1701 Key Points
¶1710 Trends in Shareholder Services
¶1711 The Proxy Process
¶1712 The Strategic Importance of the Proxy Process
¶1713 Shareholder Activism
¶1714 Executive Compensation
¶1715 Meeting the CD&A Requirements
¶1716 Options Repricing
¶1717 Broker No Votes
¶1718 Shareholder Access to Proxies
¶1720 Proxy Solicitation Firms and Transfer Agents
¶1721 Proxy Solicitors
¶1722 Major Transfer Agents
¶1723 Proxy Voting Advisors to Institutions
¶1730 Internet Access
¶1731 Universal Internet Availability of Proxy Materials
¶1732 Electronic Voting Gaining Favor
¶1740 Shareholder Maintenance Services
¶1741 Escheatment: Locating Lost Shareholders
¶1742 Investor Data Services
¶1743 Odd Lot Buybacks
¶1744 Dividend Reinvestment
¶1745 Direct Stock Purchase
¶1750 Preparing for Annual Meetings
¶1760 Employee Stock Incentives
¶1770 Regulations Guide Insider Trading
¶1771 Trading Windows and Blackout Periods
¶1772 The SEC Is the Insider Trading Watchdog
Tab 1800 Measuring Investor Relations
¶1801 Key Points
¶1810 Getting Started - Understanding Your Role
¶1811 Benchmark Where You Are Today
¶1812 Creating Quantitative and Qualitative Objectives
¶1820 Specific Measures to Consider
Tab 1900 IR Resources
¶Resources for Tab 100: Investor Relations -- A Primary Corporate Function
¶Resources for Tab 200: Securities Market
¶Resources for Tab 300: Analyzing the Investment Process
¶Resources for Tab 400: Organizing Investor Relations Procedures
¶Resources for Tab 500: Disclosure
¶Resources for Tab 600: Managing Expectations
¶Resources for Tab 700: Valuation
¶Resources for Tab 800: Building Relations with the Sell-Side
¶Resources for Tab 900: Building Realtions with the Buy-Side
¶Resources for Tab 1000: Individual Investors
¶Resources for Tab 1100: Governance
¶Resources for Tab 1200: Market Research
¶Resources for Tab 1300: Technology/Web Sites/Conference Calls
¶Resources for Tab 1400: Annual Reports and Other Printed Materials
¶Resources for Tab 1500: Media Relations/Crisis Communications
¶Resources for Tab 1600: IPOs, Turnarounds, Small Caps, and Global IR
¶Resources for Tab 1700: Shareholder Services
¶Resources for Tab 1800: Measuring IR
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