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Research suggests using Web to talk to investors.

A research report published by the Institute of Chartered Accountants of Scotland advises companies to use e-mail and the Internet to enhance the timeliness and completeness of information available to investors, and to ensure that the availability of such information is brought to their attention. Claire Marston, of the Durham University Business School, says in her report Investor Relations Meetings: Views of companies, institutional investors and analysts, that such steps will help put all investors “on a more equal footing”. To increase the transparency of the investor relations process, she advises companies to release fact sheets whenever new information has been released. “This will enable companies to release information at the request of analysts without accusations of unfairness,” she says. She also suggests that companies should keep files of analysts’ reports and provide access to them by individual investors so as to “counter criticisms that analysts are unfairly privileged”. Marston adds that the kind of forward-looking information made available by companies in their private meetings with investors should also be provided in the annual report’s operating and financial review. But the sensitivity surrounding meetings with analysts and investors is understandable. One company director said: “We get calls after an announcement from people wanting to move their forecasts. Since the Criminal Justice Act it is a problem to do that.” One finding in the report, which perhaps shows where the balance of power lies, is that companies usually go to their institutional investors’ offices for meetings, whereas brokers’ analysts go to the companies’ offices. But one institution expressed a preference for site visits: “You can tell a lot from the shape of the factory: If … you speak to people lower down you get a different, more comprehensive view of the company.”

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