Customs Street Advisors is a full service investor relations firm based in Lagos, Nigeria.

And the winners are Diamond Bank, FCMB, GTBank, Intercontinental Bank, Oando and UBA: How some Nigerian companies have taken the lead in online investor relations (2).

A survey of Nigerian public company websites shows that those with dual-listings in developed country markets pay the most attention to their websites, and the investor relations section in particular. While any progress is good progress and should be applauded as such, it also raises concerns about the attitudes of Nigerian companies toward local investors. It would seem that the primary motivation for allocating the resources to create and maintain a regularly updated, information rich IR section has been the need for compliance rather than a desire to facilitate access to trading data, company performance, financing and governance information. Six companies stand apart: Oando, the integrated energy solutions group, Diamond Bank, FCMB, GTBank, Intercontinental and UBA, the financial services groups. These companies have demonstrated an impressive commitment to providing investors with easy navigation to IR content, comprehensive information and the tools to process the information. In this post, we examine the IR section of each company's website, and proffer ways for innovation.

How do the investor relations sections of Nigerian company websites stack up against their international peers? In Part 1 of this post, we discussed the common perceptions on the value of investor relations (IR), the fundamental purpose of IR, which is disclosure and how effective IR reduces information asymetry and the cost of equity capital. In Part 2, we carry out an analysis of the websites of the six companies selected as pioneers in online IR.

It is almost too easy to perform an investor relations section review in isolation of all the other sections and the broader offline practices related to that section. For instance, a review of the IR section may tick all the right boxes yet the company’s overall IR strategy would be deemed unsuccessful if it does not tie this in with its offline practices. For instance, there will be no point having all the company’s investor presentations online, if there was no senior internal person with the knowledge and authority to respond over the phone or via prompt email turnaround to follow-on investors’ and analysts’ questions. Similarly, the IR section is part of the overall website, and one cannot assess its effectiveness without examining the overall design, content, timeliness and useability of the entire site.

Our comparative analysis of the IR sections of Diamond Bank, FCMB, GTBank, Intercontinental Bank, Oando and UBA Group websites will focus on the following key areas:

1. Navigation, which refers to the ease of discovery of information.

2. Content covers the three areas. They are:

• Company information which includes business overview, operations, strategy highlights, business units, sectoral review, competitive landscape, products & services, innovation, organizational chart, board members and executive management bios, corporate governance, etc.
• Financial information which includes financial performance review, online annual reports, financial statements, financial ratios, debt information, capital structure, company investments, recent transactions, etc. and
• Investor information which includes stock ticker, share price history, historical share price chart, major shareholders, institutional shareholding, management shareholding, market capitalization, shares outstanding, dividend history, corporate actions history, historical annual meeting proxy records, transfer agent contacts, etc.

3. Usability covers all elements that facilitate interaction with the site’s content including email and SMS notification opt-in, share price calculation tools, business scenario and revenue modelling tools, etc.

4. Timeliness refers to how often the site is updated with relevant information.

We discuss each of the above areas briefly.

The review will compare each company against expected standards for the provision of information on company websites in general, and the investor relations section in particular. These are shown in the table below.

Although a critic may argue that there are still a lot of information and tools that these companies do not provide, we take a different view. When compared with their NSE peers, these companies are veritable pacesetters in the take off of investor relations in Nigeria. They have taken the first steps in putting in place voluntary disclosure structures and content to aid investors in making capital allocation decisions.

It would be hasty and unfair to dismiss these efforts as cosmetic or insufficient. Investor relations is a fledgling practice in Nigeria, and the growth of corporate IR is tied to the availability of knowledgeable professionals. We are confident that as more people enter the profession, the quality of IR, and online disclosure, will vastly improve with all its benefits for the companies, investors and the market at large. For this reason, we say well done to these pioneers of investor relations in Nigeria.

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