Thanks to @bropo; @robberick; @TrevorHeisler; @stefanpetter; @irwebreport; @canicoll; @DWalshIR; @Box_IR; @fredmcclimans; @InsuranceIR for making it out today!

Q1: New rules see Corp Gov & IR converging eg. CSR reporting demands for IRO: http://bit.ly/by0EbC. Should AR and CSR be combined into one report? How should IROs handle?

@fredmcclimans: ‘Interesting awakening that seems to be occurring regarding “voluntary vs compulsory” compliance. I “tend” to be supportive.’
@stefanpetter: ‘Many companies are thinking about it, but often their governance isn’t “integrated” .
@q4websystems: ‘@stefanpetter good point. This is a good opp for IROs to help take control of messaging tho IMO.’
@fredmcclimans: ‘ The issue of a single report, however, is one of practicalities. Coordination is a must, integration, however, I can’t speak to.’
@ q4websystems: ‘@fredmcclimans co’s should be proactive & do b4 it’s compulsory IMO.’

@ stefanpetter: ‘Integrated reporting must clearly integrate economic value creation with CSR.’
@q4websystems: ‘Agree, which makes it tough 4 mgmt 2 see value in reporting on it.’
@stefanpetter: ‘@q4websystems In some cases, it is easier, e.g. for CO2 emissions, energy savings, etc… But harder for other issues.’
@stefanpetter: ‘Few companies have succeeded in integrating the financial effects of CSR. At least, I haven’t found any good examples.’
@Box_IR: ‘: For co’s that it makes sense do; for co’s that it doesn’t make sense: don’t, not a 1 size fits all matter.

@fredmcclimans: ‘@q4websystems Since U mentioned CSR, here’s a 2009 post “Can Finance Managers Count CSR?” http://bit.ly/3GUVBr.’
@q4websystems: ‘@fredmcclimans thnx. I’m sure we have talked about how to define CSR in a previous #irchat, not sure we were successful?’
@fredmcclimans: ‘@q4websystems No, not very successful, which is why there needs to be some type of agreed minimum “universal” included items.
@ q4websystems: ‘@fredmcclimans yes – do u think co’s r holding back because they have no guidance on what shld be included?’
@fredmcclimans: ‘@q4websystems I think that until #CSR has a minimum accepted definition, no sane IRO would try to compare apples to oranges.’
@q4websystems: ‘@fredmcclimans fair enough. A collaboration/consensus is needed at least among sectors.’
@trevorheisler: “Can Finance Managers Count CSR?” Absolutely. CSR initiatives can result in cost savings, and for some, generate revenue. ‘
@stefanpetter: ‘And investors realize this RT @trevorheisler: CSR initiatives can result in cost savings, and for some, generate revenue.’

@stefanpetter: ‘@q4websystems Also, some businesses benefit directly from focus on a sustainable society, e.g. engineering consultancies.’
@trevorheisler: ‘ @stefanpetter Some companies have called out certain CSR initiatives as key strategic priorities for their organization.’
@trevorheisler: ‘ If it doesn’t make sense to do a combined report, at least have sections of the corp website dedicated to governance & CSR.’
@q4websystems: @TrevorHeisler we are seeing more co’s with a dedicated CSR section on their website.’
@stefanpetter: ‘@trevorheisler Yes, e.g. climate change. It’s easy to tie that challenge to the core business in the energy sector. Others?’
@robberick: ‘ I would look at Eaton Corp’s annual report.’
@irwebreport: ‘All material info should be included on AR, so if ESG is material it’s in. Materiality is key.’
@bropo: ‘I think there’s a big advantage to companies that include both. First year, statement of intent. Subsequent years, follow up. ‘
@stefanpetter: ‘@irwebreport Yes. I think more companies should drop separate CSR reports.’
@fayfeeney: ‘@stefanpetter Baxter Environmental Financial Statement. An example: measuring prevention’s success. Not easy. http://ow.ly/38eFM.’

@trevorheisler: ‘ @stefanpetter Seafood companies. Their future outlooks r very much dependent on the sustainability of fisheries & aquaculture.’
@bropo: ‘And oil spills. RT @trevorheisler: ‘@stefanpetter Seafood companies. Future outlooks dependent on sustainability.’

@bropo: ‘I don’t think any mgt team would take a hit from “we’re still seeking to understand how to share but here’s where we’ll start”.
@fredmcclimans: ‘@bropo They many not take a “hit”, but it will impact the bottom line and could be confusing for many trying to compare Co’s $ #’s.’
@bropo: ‘@fredmcclimans That’s why you don’t begin with numbers. And when you do, you state them clearly & watch how analysts integrate.’
@robberick: ‘Cos have to connect the dots between #CRS efforts and strategy/results.’
@robberick: ‘Cos have to give investors a reason to care about #CSR efforts, otherwise it’s just “nice” news. #IR team should address this.’
@bropo: ‘And start to est. relevant metrics.’ RT @robberick: give investors a reason to care about #CSR–IR team should address this
@fredmcclimans: ‘@bropo I was thinking of a more discrete publication/breakout, rather than bundled/buried in an AnnReport or Call Transcript. ‘
@fredmcclimans: ‘@Bropo Ooops – just saw the post from @InsuranceIR “vision belongs in the 10-K/10-Q (SEC wants it there). Permanent record!”
@bropo: ‘Shd be comm in multiple ways. RT @fredmcclimans: thinking of a more discrete pub, rather than buried in an AR or Call Xscript.’
@bropo: ‘Def. But can/shd be other places too. RT @fredmcclimans: “vision belongs in the 10-K/10-Q (SEC wants it there). Permanent record!”

Q2: NIRI Study re: guidance: http://bit.ly/cQ7bo8; what should govern guidance policy?

@q4websystems: ‘ NIRI study found 90% co’s provide forward-looking guidance; 81% provide on @ least 1 fin. measure; 48% on non-fin.’
@bropo: ‘ Sanity and realism should govern guidance!’
@irwebreport: ‘I don’t put much stock in NIRI surveys. There’s a gulf btwn what they say and what they actually do.’
@trevorheisler: ‘Providing non-financial metrics can help investors gauge a company’s performance/progress.’
@DWalshIR: ‘ Companies can poll investors to ask which metrics would be helpful to provide guidance on.’
@trevorheisler: ‘ Disclosing corporate milestones & other objectives within context of long-term strategy allows investors to measure progress.’
@fredmcclimans: ‘@trevorheisler Totally agree – disclosing milestones against a corporate vision/map is very powerful, provided it is non-$$ based.’
@robberick: ‘Problem comes from the fact mgmt’s don’t have clarity on milestones and often wrestle w/BOD on l-t strategy.’
@InsuranceIR: ‘@robberick: Too many mgmts can’t/won’t articulate strategy. Easiest to say “just believe us, it will be xx cents” or whatever.’
@fredmcclimans: ‘Path of least effort>RT @InsuranceIR Too many mgmts cant/wont articulate strat. Easiest 2 say “just believe us, it will be xx cents”.’
@bropo: ‘This is where IR should take a page from PR’s book: 1st u tell em what ur gonna do, then u do it, then u remind them u did it.’
@irwebreport: ‘Guidance should be about sharing management’s thinking about the future, not about predicting specific results.’
@bropo: ‘Bingo! RT @irwebreport: Guidance shd b about sharing mgt’s thinking about the future, not about predicting specific results.’
@fredmcclimans: ‘@irwebreport Yup, guidance should be about mgmts thoughts on future. Wonder how many publish/archive these “thoughts”?
@bropo: ‘US companies file; shouldn’t be a surprise.’
@robberick: ‘@irwebreport thou scale/context is important when painting a picture of the “desired state”.
@bropo: ‘@irwebreport Guidance should definitely include thinking about the future, but some metrics imp.’
@irwebreport: ‘And I predict that 90% of CFO’s will continue to guide with point targets despite the disincentives.’
@InsuranceIR: ‘IMHO, giving specific guidance often leads to “lazy” investors who lack insight into business drivers.’
@robberick: ‘@InsuranceIR not sure I agree re” “lazy” investors… times have changed and #IR needs to connect the dots as much as possible.’
@InsuranceIR: ‘@robberick. Sorry, to be clearer … if mgmt ONLY gives specifics of lots of metrics to avoid strategic vision.’
@bropo: ‘Only if u walk away. RT @InsuranceIR: IMHO giving specific guidance leads to “lazy” investors who lack insight into biz drivers.’
@InsuranceIR: ‘Vision should be in 10-K/10-Q (SEC wants it there). Permanent record!’
needs to connect the dots as much as possible.’
@irwebreport: ‘Agree @InsuranceIR: IMHO, giving specific guidance often leads to “lazy” investors who lack insight into business drivers.’

@q4websystems: Does greater sell-side coverage dictate whether a co should provide guidance?’

@bropo: ‘Coverage or no. RT @q4websystems: Q2: does greater sell-side coverage dictate whether a co should provide guidance?
@trevorheisler:’@q4websystems To the contrary, I believe that increased sell-side coverage decreases the need to provide guidance.’
@bropo: ‘With upheaval, many tech cos. have gone to annual guidance on #’s. Prob if u have trad’l seasonality, frustrating 2 investors.’
@DWalshIR: ‘w/out guidance, sell-side estimates can be all over the map. It also helps to attract coverage.’
@q4websystems: ‘As co’s r often held to anal estimates. RT @DWalshIR: Q2: w/out guid, SS esti can b all over the map. It also helps 2 attract cover.’

@q4websystems: ‘When (if ever) should co’s discontinue guidance?

@robberick: ‘When it’s no longer reliable.’
@DWalshIR: ‘If management’s outlook is cloudy and they are not confident, they should not give guidance.’
@robberick: ‘@DWalshIR though they should explain the change in the terrain and how they’re dealing with it.’
@DWalshIR: ‘@robberick right, and provide non quantitative metrics.’
@bropo: ‘Not on a Q-by-Q basis: decide and stay with it.’
@DWalshIR: ‘And and if ceasing guidance is part of your strategy, give investors several quarters heads up about the change.’
@robberick: ‘Assume mgt/BOD gives u that kind of warning RT @bropo: Agree. RT @DWalshIR: Q2: give investors several qtrs heads up about change.’
@bropo: ‘Needs to be part of strategic IR planning. Communicating Y is critical. RT @robberick: Assume mgt/BOD gives u that kind of warning.’

@q4websystems: ‘It was suggested in the article that fin. guidance can counterbalance analyst estimates. wdyt?’

@bropo: ‘Shouldn’t be so far off. RT @q4websystems: Q2: article suggested that fin. guidance can counterbalance analyst estimates. wdyt?
@q4websystems: ‘@bropo Agree anal. estimates shldn’t b that far off. Value in speaking regularly 2 investors 2 ensure they get investment prop.’
@stefanpetter: ‘Helping analysts and investors build a deep understanding of the drivers of the business is more important .’
@canicoll: ‘Hi All, @bropo, I would listen to Fin Guidance IF it was consistent over time, vs analyst estimates if they were inconsistent.’
@q4websystems: ‘@canicoll consistency definitely important.’
@bropo: ‘Mgt death by inconsistence! RT @canicoll: would listen to Guidance IF it was consistent OT vs analyst est if they were inconsistent.’
@irwebreport: ‘Analysts who are out of sync with consensus either become Heroes or unemployed. Let market sort them out.’
@bropo: ‘And mgt out of synch have same fate. RT @irwebreport: Q2 Analysts out of sync with consensus either become Heroes or unemployed.’
@bropo: ‘For guidance to be completely off means mgt is out of sync with their biz/industry. Def. shd pull back on industry confusion.’
@canicoll: ‘@bropo – Out of Sync: agreed, or blind to sales channel, customer conditions. Both are “bad”. ‘
@bropo: Very very bad! RT @canicoll: @bropo – Out of Sync: agreed, or blind to sales channel, customer conditions. Both are “bad”.

Don’t forget to join us every Thursday @ 11:00 a.m. EDT. In the meantime, if you have any questions you’d like to submit for an upcoming #irchat, DM  @q4websystems or email sherylj@q4websystems.com.

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Unfortunately, recent survey results suggest many US companies are not going to impliment such a policy this year either.  This news is from a slightly different perspective than I’m used to reading it from, being an HR based company – but CSR covers a lot of ground and there’s room for everyone.

I think I like the perspective of this opinion bit - that CSR comes from community and government enforcement.  Waiting for businesses to change on their own will take too much time…

I think what makes CSR that much harder is that it’s so hard to measure, in terms that mean the right things to the right people, anyhow.  There are guidelines available – and a place to read the reports - but I still haven’t found a good way to reflect on them as a group, yet.

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