Best Practices for Organizing an Investor Day

13 August 2010

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InvestordayWhenever my good friend Dan Dykens aka @meetthestreet is unable to host #irchat, I get the pleasure of stepping in for him.  For those of you who aren’t familiar with the term, #irchat is a weekly one-hour event held every Thursday at 11:00 a.m. EST on Twitter for IR professionals.

Each week, we tackle three-four questions that address IR-related issues, trends and to generally exchange ideas. The session has garnered quite the following and has become a popular hashtag on Twitter.

Recently, @IR_practice one of the regulars and a great IR resource in general put out an open call to #irchat asking if anyone could share a link on best practices for organizing an investor day.  With experience as both an in-house IRO and IR consultant, I began to look through my files to see if I had anything to offer.  I also put in a few requests to friends and ex-colleagues in the IR profession and was surprised that no one had anything written down.

So in an effort to generate some concrete best practices, I posed this question on #irchat this week.  The question generated a lot of great ideas so I thought it would be useful to compile the output (all I have to say is thank goodness for whatthehashtag).  If you have something to add, please do – as it’ll help all IROs and IR professionals around the globe.

I have gone through the transcript and have broken the conversation down into key areas:

Making the Decision

There are many reasons to host an investor day.  It can be as simple as providing a general corporate update to providing details around a recent event such as an FDA approval or a merger or acquisition.  To be simplistic they can help get the broader story out.  They can also help investors get familiar with the management team (and help them gain confidence in them). Similarly, they can give the management team the opportunity to gain experience speaking in front of investors.

Sometimes, companies may also combine an investor day in conjunction with an industry meeting which is a good time to do so as some key investors may be in town already.

Time of year, Location and Time of Day

The consensus on the best time to host an investor day was to avoid earnings season.  Investors typically cover more than one company so they will have more than company they are following reporting at the same time and will be busy putting out their reports.  Further, an investor day should be held when you have something new to share and if you just reported earnings, it is likely that you won’t have much more to say to them for the time being.

Once you decide when you are going to have your investor day, careful thought should be put into the location.  You should consider where the majority of your investors reside and have it in a location that is central and easily accessible.

In addition to location, the time is also crucial and it was determined that the best day to have an investor event is a Tuesday, Wednesday or Thursday in the morning or lunch time, with breakfast or lunch served.  Although an interesting point was made in support of having the event on a Friday: there may be incentive for an investor to go (especially if it is out of town) as they could make a weekend out of the trip.

Company Participants

Hosting an investor day can give a company the opportunity to provide access to other members of the management team. For example, having senior managers talk about their division will help generate a better understanding of the business.  It can also help the managers get first exposure to the capital markets.  In general, think about your sector and who internally could help investors gain a better understanding of your business.

In addition to internal members of the company, consider a presentation by an industry expert such as an analyst or economist who can provide a macro perspective.

ebay_investorday

Preparation

Adequately preparing the team is essential particularly for those who have never or are not exposed to this audience that often.  So a conversation about Reg FD is critical.  Also doing a dry-run of the presentation and having a mock Q&A will help everyone get comfortable and trained in what can/cannot be said.

At this stage of planning, you should post the information on your website.  A great suggestion was made to have a dedicated landing page that will go live on the day of the event.  You should provide where the event is being held and also provide bios of who will be speaking – especially if you decide to have external guest speakers.

You can also broaden your audience by webcasting and recording the presentation. Applied Materials ($AMAT) was referenced as an example of a good investor day as they did a video webcast from New York.  So you should also let visitors know it will be webcast and that a presentation will be made available after the event is over.

You may also consider an interactive discussion whereby investors can call in and ask live questions.  So you will have to consult a webcast service provider to help with the logistics. Note: video webcasts can be costly, so if it’s not in your budget, bare minimum is to webcast and record.  There is great value in doing this, as you can post the links on your website, embed them on SlideShare, YouTube or Vimeo so they can be easily shared by others.

Once you get the website details set up, you should also determine what materials will be made available to participants.  Someone made the point that attendees are leaving their laptops at home and instead using their smartphones.  So if you are using powerpoint, having a printed color copy with three slides to a page with lines to make notes (handout version) will allow them to jot stuff done if they want.

Also more companies have adopted social media so if you use Twitter you should consider live-tweeting the event.  If you do live-tweet, send out a couple of tweets a few days before the event, announcing the details as well as the hashtag that you’ll be using.  Hashtags enable people to follow a conversation about a certain topic in real-time.  Their increased popularity on Twitter has also led to a number of services (like whatthehashtag) which compiles a particular hashtag feed and archives it, so anyone can read the transcript at a later time.

Encana_investor day

Showtime

You should arrive early the day of the event – you want to ensure that any equipment such as projectors, screen etc. have been set up.  You may also want to do a quick spin through of the presentation to ensure it loads correctly and test the webcast feed to minimize any potential technical difficulties during the event.

If you are live-tweeting the event, you should remind attendees of the hashtag and of your twitter handle or of the person doing the live-tweets.  You should also encourage questions to come over the channel and reiterate that they must include the designated hashtag to ensure it is seen and can be addressed. Lastly, you may also want to set up a separate screen with a laptop so everyone can see the tweetstreeam.

In order to prepare for follow up, it is a good idea to have a table where attendees can sign in.  Someone should be sitting there to greet the arrivals, direct them to sign in and collect business cards.

The IRO should be the host and do the welcome and introductions of the panel.  This helps the IRO gain some visibility as it is more than likely that they have never met any of these investors in person before.

During the introductions, the IRO should establish whether questions will be taken during or left until the end.  In my experience I have seen it done both ways, but IMO I think it is more effective left until the end especially if there are several speakers.

During the Q&A it is always a good idea to get people to use a microphone and have the panel repeat the questions as you want to ensure it can be heard over the webcast.

After the main Q&A is over, sometimes attendees linger around to ask management questions. This is a good opportunity for the IRO to get introduced and let them know they can be contacted directly for any follow up.  It is also good for the IRO to put their face to their name as it will make it easier to contact the investor in the future.

Also if a tough question is being asked of management, by being there, the IRO can ensure that nothing is being disclosed that shouldn’t be.  They can also make a note of the question as it may reveal an issue that should be addressed in the company’s messaging. It should also be noted if an investor wants a softcopy of the presentation sent to them or want a follow up meeting with management.

A Few Things to Ponder

There are a couple of ideas that were touched on during the discussion that I tried to weave into the categories, but I wanted to highlight them to gauge your feedback:

Giveaways

An example was given of a telephone company who offered participants at their investor day good deals on their products/services.   This could be a good way to enable investors to experience your business first hand. By doing so, they can intelligently provide feedback and ask informed questions.

Of note, this company is located in Europe so this may be an acceptable practice there.  I have been to investor days where companies have provided food samples etc.

What are your thoughts on giveaways? Is giving away a service like the phone company or a product acceptable?

Archive

How long should a company archive an investor day on their website? Three months?  Six months?  A year?  Further, if your company has more than one investor day during the year, should all of the archives be kept or should the first one be replaced with the most recent?

I look forward to your feedback!

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