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SEAL OF BEST PRACTICES - AN INTRODUCTION
Principles: 'Disclosure', 'Scrutiny' and 'Accessibility'
The 'Seal of Best Practices in Investor Relations' program has evolved since
September, 1996, under the auspices of a
Board of Directors answering to a membership primarily comprising individual
investors, when the non-profit Investors
Research Institute, Inc. was established to develop and implement a program to insure
that all classes of investors may
have timely access to information about public companies equal to that previously
available only to Wall Street
professionals.
A growing number of Street professionals have joined or endorsed the missions of IRI
because they believe not only in
the inherent fairness of IRI's standards, but also that if individual investors have a higher
level of comfort in the
marketplace, a higher level of capital will flow to the small- and mid-capitalization
marketplaces, creating jobs,
opportunities and economic strength. Any sized public company may voluntarily
pledge, through its corporate officers,
to uphold the principles that are at the foundation of the Institute's 'Seal' program.
THREE PRINCIPLES
To achieve its missions, and on behalf of its individual investor members, IRI has
established task forces and programs
built around a tripartite grouping of "Best Practices" principles under which public
companies may qualify to receive a
"Seal of Best Practices in Investor Relations" upon agreeing to adhere to its set of
guidelines. A public company may
join IRI and display the general Corporate Member Seal by agreeing to these
principles. A company may achieve a
special, or "Elite", status by reporting it has satisfactorily achieved of all of the
milestones signifying superior investor
relations in each of the following categories: "DISCLOSURE", "SCRUTINY" and
"ACCESSIBILITY".
ELITE SEAL OF BEST PRACTICES - SPECIFIC MILESTONES CHECKLIST
Investors can ask companies you follow: "Where's Your Seal?"
'Elite': achieve each of the following within year of enrollment.
Dates and documentation should be attached to the IRI 'Report Form' verifying the
following:
SCRUTINY
The principles of "scrutiny" are achieved through:
__ A. ANALYST COVERAGE.
__ 1. Analyst coverage must be professional and independent.
__ 2. Coverage must be no less than quarterly, following each earnings release.
__ 3. Analyst must be qualified by experience and/or professional training in the CFA
program.
__ 4. Analyst may not be paid by company, directly or indirectly.
__ 5. Public Analysis & Review (PAR) or comparable enrollment is acceptable for
qualification.
__ 6. The reports should be given the widest possible distribution.
__ 7. Report summaries must be simultaneously released to all classes of Investors.
__ 8. Full text of analyst report(s) should be accessible on the world wide web.
ACCESSIBILITY
The principles of "accessibility" are achieved through:
__ B. CONFERENCE CALLS.
__ 1. At least one conference call must be scheduled annually.
__ 2. All conference calls must be pre-announced to all classes of investors.
__ 3. All calls must be equally accessible to individual investors, minimally on "listen"
mode.
__ 4. At least one conference call annually must accept questions from individual
investors.
__ 5. "Listen" mode may be achieved via a simultaneous audio or video webcast.
__ 6. Transcripts of conference calls should be posted on the world wide web.
__ C. INVESTOR PRESENTATIONS.
__ 1. At least one annually must be before an audience which includes individual
investors.
__ 2. All presentations should be pre-announced, via a generally-distributed press
release.
__ 3. The qualifying presentation must be globally available via simultaneous audio or
video webcast.
__ 4. The audio or video should be archived and available on a website for at least
90-days.
__ 5. The archival should include a text transcript linked to or posted with the webcast.
DISCLOSURE
The principles of "disclosure" are achieved through:
__ D. CORPORATE INFORMATION.
__ 1. Companies must strive to achieve timely issuance of corporate reports.
__ 2. A corporate profile must be available via Market Guide, Standard & Poor's,
Hoovers, or other comparable
agency, or prepared by the company in comparable format and posted on a website.
__3. Companies which are not "fully reporting" as defined by regulation, to receive the
'Seal', however, must make
public comparable quarterly financial information and disclosures required by such
filings.
__ E. PRESS RELEASES.
__ 1. Press releases must be given the widest distribution, insuring equal access to
individual investors.
__ 2. Timing of press releases must not favor professional traders with after-hours
trading access.
__ 3. Pre-market releases are encouraged to be posted and/or issued after 6 p.m. ET
on the previous trading day to
provide individual investors with adequate opportunity to perform personal diligence.
__ F. DILUTIVE EVENTS ANNOUNCEMENTS.
__ 1. Any change in the number of shares issued or made available in the course of a
financing must be announced at
the time of the dilutive event.
__ 2. Disclosure regarding insider buying or selling must be made at the time of the
event.
__ G. WEBSITE DESIGN.
__ 1. Timely electronic posting of new corporate materials must be achieved.
__ 2. A separate website, or separate section for investor information must be
available.
__ 3. A minimum of three (3) years of press releases must be archived.
__ 4. Easy contact points for investors to speak with company representatives must be
included.
__ 5. The site should contain, or link to all professional commentary about the
company, pro and con.
__ 6. The site should contain, or link to all information about the company.
IRI standards are voluntary; IRI has no independent means to verify the accuracy of
information provided bo it by the
companies, but invites members of the organization and the general public to send
electronic e-mail to
iri@investorsresearch.org questioning any company's compliance with its verified
reports. IRI sponsors a number of Task
Forces with oversight into each of these standards.
The standards are thus subject to change at any time. All members of IRI are eligible to
serve on the 'Task Force on Best
Practices in Investor Relations' as well as its subpanels, or to effect the standards by
other means consistent with the IRI
by-laws. for membership information, write iri@investorsresearch.org. |
