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Playing Fair: Suggested Ways to Stay Onside Regulation FD
New rules on disclosure are the hot topic these days for all public companies.
They have created an atmosphere of uncertainty and angst among executives and
IR professionals who are now second-guessing common practices of the past.
To help you play fair, here are some tips from Fundamental Communications:
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Put whatever future guidance you are willing to give in quarterly news releases
and repeat that guidance, verbatim, in the quarterly conference call/webcast.
Do not add a different flavour or spin to the guidance because it could send mixed
signals. If you are updating this guidance, it must be done via widely disseminated
news release.
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Limit the number of company spokespeople and always rehearse questions –
particularly those related to future guidance – with these designated representatives
before investor presentations. Make sure all understand the importance of sticking
to the script on guidance – no exceptions. Be cognizant of the tone of your
remarks…the tone of your voice…which can act as a signal to investors.
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Have someone intimately familiar with past disclosure attend all investor
meetings. He/she should not be a presenter but rather be there to determine if
an inadvertent disclosure was made during the meeting.
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Always stand ready to issue a news release if an unintended material disclosure
was made during an investor presentation or one-on-one meeting.
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Institute a quiet period before quarterly results are released. This quiet
period usually begins when results become reasonably apparent. Do not discuss
business conditions with shareholders/analysts during this time.
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When entertaining shareholders/analysts (one-on-one or in groups) focus
on long-term issues – growth drivers, missions, goals, strategies,
competitive advantages, general business trends – not on short-term earnings.
Make the parameters of the meeting clear from the outset.
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Use push technology, which means providing interested parties with an email
alert notifying them of upcoming conference calls, web postings and quarterly
releases. If practical, send more than one notification before a web cast.
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Post investor presentations to your web site, even those that are not company-sponsored.
If it’s not possible to webcast these live, include copies of management’s
remarks and a transcript of the Q&A. These remarks should be scripted, not
given extemporaneously. Consider posting news releases based on investor presentation
content, even if material disclosure has not been made, as a way to draw attention
to longer-term business issues.
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Comment on analysts’ models but only to correct errors of historical
facts that are in the public domain or other fully disclosed material. Do not
distribute analyst reports.
For more information on fair disclosure, speak to Fundamental Communications
today.
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