Examining best in class featuresof FTSE 100 onlineinvestor centres

DIRECTIONSSUPPLEMENT

JANUARY /FEBRUARY 08

TRENDS AND ISSUES IN THE WORLDOF CORPORATE REPORTING

Online stakeholder communication is playingan increasingly important role in investorrelations. But the core aim remains the same:to communicate relevant and up-to-dateinformation to the investment community.

Investor centres are not simply a repository offigures and financial data but neither shouldthey be approached purely as a marketing tool.The key is balance. The most successful sitesbecome portals through which companies caninteract with their stakeholders; communicatingstrategy, performance, direction and culture,in ways specifically intended to be moreaccessible for all stakeholders, large and small.

Research overviewIn order to get a clearer picture of theapproach currently taken by leading companieswe reviewed the FTSE 100 online investorcentres. Our aim was to understand thedifferent stakeholder communication optionsavailable and to highlight the successfulfeatures across the sites that deliver the mosteffective user experience.

We analysed all the sites against a numberof criteria, including: a clear overview of thecompany’s strategy; a strong investmentcase; content tailored to both private andinstitutional investors; good usability;appropriate use of technology; and clearlysignposted e-communications.

Overall, all FTSE 100 investor centre siteswere good at what we might term basichygiene factors: up-to-date information;archived information to allow users to accessa company’s performance over time; andIR contact information with phone, emailor address details.

All sites contained reports and accountswith 26% including basic PDF versions onlyand 65% also offering an additional HTMLversion for more convenient browsing online.(Of interest, 17% of sites provided sectionedPDFs as an alternative way of viewing andprinting large documents.)

But while broadly speaking our research showsthat all the FTSE 100 provide similar onlinecontent, companies do differ widely in theway they choose to present information aboutthemselves – ranging from minimum levelsof statutory compliance to more creativeand engaging forms of communication.

ConclusionIn summary, over and above the statutoryrequirements, there is a marked difference inthe manner in which information is presented.The availability of new web technologies andchanges in e-communication are fundamentallyaltering the way companies can interact withtheir stakeholders. But these innovations areonly effective when used appropriately toenhance a stakeholder’s overall experience orunderstanding of the company. The sites thatwe have chosen to highlight as ‘best in class’all provide good examples of companies thathave achieved the right balance of providinguseful information in the most accessible andengaging manner possible. We hope you agree– but, as ever, let us know your views too.

Directions SupplementJanuary / February 08

“Investor centres are not simply arepository of figures and financialdata but neither should they beapproached purely as a marketingtool. The key is balance.”

What makes a good investor centre, what purposeshould it serve and how should companies approachthis valuable communication resource?

Rob NewhamHead of InteractiveSalterbaxterrnewham@salterbaxter.com

Welcome to the new edition of Directions Supplement. In this issue we examine the emergence of the online investor centre as a point of contact between a company and the wider investmentcommunity. When done well an investor centre provides aninformative, clear and engaging communication channel for allstakeholders. But with a variety of audiences, changes in legislationand a bewildering array of new web technologies available how are the leading companies approaching their investor centres?Salterbaxter’s Head of Interactive, Rob Newham, reviews the FTSE 100 companies and identifies some ‘best in class’ features.

Company strategy / KPI overview

We were interested to find that only 34% ofthe sites provide an overview of the company’sstrategy or aims. Although on furtherinvestigation this information was usuallyfound on either the main corporate sites, or deeper within the investor centre, we feltthat its usefulness was lessened.

There was a wide range of ways in whichstrategic information about the companywas presented: ranging from text-heavydescriptions to more accessible overviews,which contain a mixture of text, graphics,animation, and even video, to explain thestrategy clearly. Cadbury Schweppes (OurPurpose and Values), Centrica (Our Vision) andImperial Tobacco (Group at a Glance) are goodexamples of sites that successfully combinesuch features to make strategy clear.

The Investment Case

It’s essential not to assume that stakeholdersalready know about a company prior to visitingthe investor centre. However we found thatonly 13% of the sites surveyed provided aclearly labelled case for investment. And whilemany companies do touch on the subject byincluding prominent positioning statements(such as Imperial Tobacco’s ‘We’re committedto creating value for our shareholders’) theydon’t go far enough.

It’s not a case of the hard sell. In the bestexamples it’s used as a platform for a memberof the senior management team to communicateone-to-one with stakeholders. For instance,Aviva feature a clearly signposted and powerfulinvestment case on the homepage and give anoverview of the key reasons to invest in thecompany by the CEO, David Moss.

Personalisation

Online investor centres provide the ideal meansto cater for different audiences – privateinvestors, professional and institutionalinvestors, analysts, media, regulatory bodiesand government – through the provision oftailored information. Although only 14% of thesites currently provide personalised contentthere is little doubt that this will increase asWeb 2.0 technologies continue to be used.

The sites using personalisation most effectivelycontain prominent homepage navigationfeatures to allow different stakeholder groupsto find information specifically relevant tothem more quickly. For instance, on Centrica’shomepage a button to prompt users ‘What doyou want to do?’ gives drop-down options forbrowsing deeper within the site. Other goodexamples of effective personalisation can beseen on the homepages of Cadbury Schweppes(‘I’m interested in…’), BT (‘Useful resources& links’) and ICI (‘Right Information For You’).

Centrica plc‘Our Vision’: a clear and simpleoverview of the company’sstrategy and aims. It is contentdriven, using plain language toconvey its message, withoutrecourse to technologicalgizmos. This site also containsan efficient summary of thewider marketplace to allowinvestors to form a fairjudgement about the company.

Also of note:Cadbury Schweppes plc,Imperial Tobacco plc,Smith & Nephew plc

BP plc‘Investing in BP’: a key featureof a consistently strong investorcentre. It contains all relevantinformation in one place andacts as a portal to greater detaildeeper within the site. The‘Learn about Investing’ tutorialcourses are a particularly usefultool for the retail investor.

Also of note:Aviva plc

Aviva plc‘Your Page’: the most powerfulexample of the potentialopportunities of Web 2.0 andpersonalisation. The site allowsusers to create their ownbespoke investor pagecontaining content tailoredspecifically for their needs.Other features include personalalerts, reading lists, bookmarks,calendar and notes pages.

Also of note:BT plc, Cadbury Schweppes plc,Centrica plc

“Innovations are only effective whenused appropriately to enhance astakeholder’s overall experience.”

Aviva

Aviva

ICI

Cadbury Schweppes

BP plc

Cadbury Schweppes

Imperial Tobacco

Centrica

Usability

We found that 79% of sites provided convenienthighlights and quick links on the homepageto allow users to navigate to more detailedinformation quickly. Good examples of thisare the intuitive layouts of the Centrica,Imperial Tobacco, Shell and Unilever investorcentres. Of interest, 37% of the sites reviewedcould not be found via a user-friendly URL(e.g. www.vodafone.com/investor) whenentered into a search engine or browser.

It’s also essential that online investor centresare accessible to all stakeholders, regardlessof their physical or technological capability,and where possible should adhere to W3CWAI’s Web Content Accessibility Guidelines.We were interested to find that 21% of sitesdo not yet even include a basic accessibilitystatement. The inclusion of simple tools suchas navigation shortcuts, access keys (keyboardshortcuts that replace the need for a mouse)and font resizing for visually impaired users(as seen on the British American Tobaccohomepage) ensure company information isaccessible for all.

Technology

Our research confirms that Web 2.0technologies and rich media have beenenthusiastically employed by the FTSE 100companies: 69% of sites now containwebcasts, vodcasts or podcasts alongside themore traditional PowerPoint presentations.

46% of sites surveyed also include online tools(either provided by a third-party or embeddedwithin the site) such as the interactive analysttools provided by Aviva, Cadbury Schweppesand Vodafone. We were interested to see theincreasing availability of information via mobiledevices as seen on the Aviva, J Sainsbury, Rolls Royce and Shire sites.

E-communications

With amendments to the Companies Act 2006allowing wider e-communications we wereinterested to note only 12% of the FTSE 100actively promoting the benefits of electronicdocumentation. Where companies do, Centrica’s‘Electronic Shareholder Communication’section is representative of the approach takenby highlighting the advantages of the switch in terms of benefit to both the individualshareholder (‘improved efficiency, ease of access and online voting’) and theenvironment. We would also note the use ofincentive schemes such as BT’s online sharemanagement services (including prize drawsand online portfolio management) orenvironmental initiatives (such as Scottish& Southern Energy’s tree planting scheme).

Unilever plcA winning combination ofgood design, clear content, andsimple and effective navigation.Unilever’s investor centre alsoconforms to a minimum of W3CLevel A compliance throughoutallowing all stakeholders toextract relevant informationquickly and easily.

Also of note:Imperial Tobacco plc

BT plcBT is the only site in the FTSE 100which uses video on its investorcentre homepage to enhance thequality and transparency of itsinvestor relations.

Vodafone plcVodafone’s interactive analysttool is representative of ageneral trend and allowsshareholders to interact withperformance figures in real-time.

Also of note:Aviva plc, BP plc

Rio Tinto plcAn effective initiative toincentivise shareholders toreceive communicationselectronically linked withthe company’s sustainabledevelopment agenda. If usersregister for the scheme, RioTinto buy a sapling to be usedin the Woodland Trust’s tree-planting project, which aims tohelp plant 12 million trees inthe UK over the next 5 years.

Also of note: BT plc, Centrica plc

“The most successful sites becomeportals through which companies caninteract with all their stakeholders.”

For links to all the sites highlighted please visit www.salterbaxter.com/directions19Methodology: The research is based on a review of FTSE 100 online investor centres. All research was conducted by salterbaxterand every effort has been made to ensure that the data is accurate.

Unilever

BT plc

Vodafone

J Sainsbury

Rio Tinto

BT

Making best use of online communicationsMichael Mitchell

General ManagerThe IR Society When the Investor Relations Society first

introduced its Best Practice guidelines,websites were still regarded with somesuspicion as an investor communications tool.We wanted to encourage companies to usethe new medium to best effect and thereforewe developed the guidelines as a way ofencouraging this. Today the website is the firstport of call for most investors and analysts and it is absolutely essential that companieskeep up to date with the opportunities thatdevelopments in the design and capabilitiesof the internet present. A company’s websiteis now its shop window to the outside world.The look and feel of the site reflects directlyon the company.

In the 2007 Best Practice Awards, the judgeswere impressed by the increasing breadthand depth of information held in the investorrelations sections of entrants websites –particularly in small FTSE and AIM listedcompanies – but somewhat disappointed that

the presentation of online annual reports had made little progress on the previous year. There was a feeling that companies were waiting to see what the next moves should be, particularly in respect of the newe-communications requirements introducedby the Companies Act 2006.

It is interesting to see from this surveythat the majority of companies have still to develop their e-comms policies.

We expect to see continued innovative useof websites to communicate with existingstakeholders and potential investors next year and anticipate considerableimprovement in online annual reporting.

To this end we are revising and updating ourbest practice guidelines and these will form thebasis of the awards for 2008 which will beannounced in November. Whilst we will belooking at how companies make best use oftechnology, including interactive tools such as webcasts and podcasts, we will not beneglecting the requirements for excellentcommunication of those aspects which timeand again the users of accounts say they arelooking for – namely strategy, outlook and the link between performance and directors’remuneration.

With the increase in the amount of potential information which companies may wish to disclose online, we will also be looking for clarity in the content andstructure of such communications. The IR Society welcomes this review as a veryuseful contribution to the continueddevelopment of online communications.

““Today the website is the first port of call for mostinvestors and analysts.”

To view the IR Society’s Best Practice website guidelines please visit www.irbestpractice.org

Turnover to see salterbaxter’s pick of the best in class features of FTSE 100 onlineinvestor centres.

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