<SPECIAL FEATURE>
January 26, 1999

Investors' Rights

Yi-Hsin Chang (TMF Puck)

You are a shareowner of a company. You manage your own investments and like knowing what's going on at the company. After all, you are a part-owner.

Like everyone else, you can read the company's press releases, annual reports, and SEC filings. But what you don't have access to are the quarterly earnings conference calls. These are open only to privileged analysts and a higher-class of shareowners known as institutional investors. Individual investors like you are subjected to the trickle-down effect: getting the vital information second-, third- or even fourth-hand after it's been filtered by analysts and, in some cases, unnamed sources in the media.

What's more, what little crumbs of information you do get comes hours after it's already been digested and used by institutional investors and by analysts and the traders at their brokerage firms. This means that by the time you can buy, sell, or short the company's stock, the price likely will have already jumped or dropped to reflect the impact of the newly released information.

Then there's the matter of getting in touch with the company's investor relations (IR) department. You call long-distance only to get a voice mail recording, and sometimes you never hear back from the company. You visit the company's website, but it's skimpy on any substantive information, and it doesn't even give you an e-mail address that you can use to contact the company.

Unfortunately, this scenario is not a figment of an over-active imagination. All too many public companies do a disservice to their shareowners by being hard to reach and by practicing selective disclosure through conference calls with select analysts and institutional investors. And in this age of the Internet, many companies surprisingly aren't taking advantage of the World Wide Web to disseminate information to investors. They have wimpy websites and don't even broadcast conference calls live on the Internet.

In the interest of promoting shareowners' right to know, we now present a first look at how user-friendly some companies' investor relations efforts are. We picked an initial batch of 20 well-known companies and examined their IR websites and policies for discussing quarterly earnings and other pertinent announcements. We made an effort to talk to people in the IR departments -- some were very helpful, while others, frankly, gave us the cold shoulder.

Then we rated the companies on a scale of 1 to 10 in terms of the effectiveness of their IR efforts (see the explanation of methodology accompanying the actual ratings). While some might say we were a little harsh on some otherwise great companies, we stress that this survey only addresses the companies' IR departments, not their profitability, revenue growth, market share, or brand recognition. Most of these big-name companies are great businesses, but they all could stand to improve their shareowner services -- some more than others.

We challenge these and other companies to reach out to their shareowners -- big and small. We plan to re-evaluate these companies and rate more companies in the months to come. We'd like nothing more than to give out all 9's and 10's.

For Foolish shareowners out there, we encourage you to contact your companies and demand your shareowner rights. We have drafted a letter you are welcome to use to send to the proper authorities.

Of course, if you disagree with our ratings or comments, please feel free to air your views on our message board. Also, we hope you will share with the rest of the Foolish community your dream and nightmare experiences with IR departments.

Let's all work together to remind companies to put shareowners first.

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