While Catherine prepares for her well-deserved vacation, I’ll do the honours by posting this for her. Catherine was recently interviewed by CMA Management Magazine regarding corporate disclosure and electronic reporting in Canada. You can read the full article here.

Yesterday I had the pleasure of meeting with John Hughes from Deloitte. John shared some recent findings regarding “Fundamental Investors” that I thought were quite interesting. John said:

All companies make a choice (consciously or unconsciously) in deciding how they will present themselves to the market. The quality of the information provided to the market is a factor that contributes to increasing valuations and lowering cost of capital. This “premium” is not something a company can obtain for itself over night, but even incremental market gains from a long-term investment in building a disclosure “brand” can easily justify the direct cost of that investment.

Recent research by McKinsey, cited in a recent Globe And Mail article, suggests that retail or short-term oriented investors seldom trade enough shares to make a real difference in a company’s long-term share price. The largest shareholders, such as pension funds or mutual funds, also often have little influence over the price of the stocks they hold, because of their emphasis on tracking performance relative to a published index.

 McKinsey concludes as follows:

This leaves a group we call “Fundamentals Investors” because they buy or sell stocks based on a long-term perspective of their intrinsic value relative to current market price. They also buy positions large enough to exert influence, as activist investors, on the board and management. These firms typically hold a small number of companies’ stock, and they trade less frequently - but, when they do they trade large enough blocks to affect the stock price.

Fundamentals Investors should be the target audience of a company’s investor relations strategy. Because these investors are more interested in company and industry fundamentals than in short-term performance, communications strategies should focus on the company’s long-range strategy and the industry’s prospects. Investments in growth projects, the pipeline of new products, fundamental profit metrics such as customer profitability, attrition or churn rates, and major market trends are all critical for these investors.

Seeing as many of you may be hip-deep in annual reporting I thought I’d share this interesting piece with you. A designer named Nicholas Felton has published an annual report of his life for the last 3 years. Although fluffy from a content perspective, Nicholas has some very creative ways to display the information of the year gone by. Read the complete Post.

Article from Don Tappscot from the first day of the World World Economic Forum in Davos showed up yesterday. It has an interesting note about transparency that I wanted to share:

One of most insightful for me was with Samuel DiPiazza, the CEO of PricewaterhouseCoopers. PWC has been a leader in the next generation of reporting – they call it value reporting – where the financial report is about al lot more than earnings and financial information. XBRL and the Web 2.0 are poised to transform reporting, where the focus will not just be on compliance but on transparency.

I wonder whether PWC could finally cash in on its leadership position in this area. More important, next-generation reporting could help companies be better understood by their stakeholders, including shareholders, not to mention bring some transparency to financial markets and in doing so possibly avoid crises such as the one we are currently experiencing.

Transparency is certainly a signficant trend in corporate disclosure that we’ll be covering more in this blog over the coming weeks.

Technorati Tags: Q4 Web Systems, Q4, XBRL, Corporate Disclosure, Corporate Reporting, Best Practices, PWC, Tapscott, Davos

With the over arching trend of corporate disclosure being transparency, the pressures and risk of creating and distributing disclosure continue to increase. In addition to the financial disclosures, the majority of corporate disclosure occurs in non-financial form. These include commmunications such as press releases, corporate reports, presentations and web site content. The information disclosed through these channels is critical to providing the context and insight into the operations and results of your company. Not surprisingly, all of this information represents significant strategic value to your company while also representing significant risk should information be disclosed inaccurately or in a selective (non-RegFD) manner. Read the complete Post.

CSR is a big word and seems to attract attention from many aspects. 

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.