Читать книгу A Review of IR Practices in Bahrain - Mohamed Sr. Isa - Страница 9

The internet is a very important technology (Porter, 2001). It is one of the fastest developing communication channels today (Deller, Stubenrath and Weber, 1999). The internet is becoming more widely used as an integral part of companies’ IR activities (Kuperman, 2000). In the past, companies Annual Reports were the best source for company information and disclosure (Brown, 1992) whereas now a company’s website is the most important source for listed companies’ financial information (Winzell, 2006). The first step investors and analysts do to get company information is to check companies’ websites (Silver, 2004). According to Investor Relations Global Rankings (2006), companies integrate IR website to their IR programs due to several reasons including:

(a)Assisting companies in complying with regulatory requirements,

(b)Providing timely information updates,

(c)Low cost of implementation and maintenance,

(d)Maximizing the valuation of companies’ shares and,

(e)Learning more about their investors.

It is highly recommended to have an easy to use website for all audiences especially shareholders and prospective investors (Silver, 2004). According to one survey, almost 90% of investors state that websites largely affect their perceptions about companies (Thomson Financial, 2006).

In addition, IR websites result in improved efficiencies through reaching more stakeholders in less time with less effort and could result in other operational cost savings.

In one survey, the authors found that companies in USA use internet based IR more than that of those companies in UK and Germany. IR websites are used for a variety of reasons including providing financial Statements, interim reports, publishing press releases (Deller, Stubenrath and Weber, 1999), share price, and IR contact information (Andersen, 2003). Deller, Stubenrath and Weber (1999) found that internet technologies were not fully exploited in USA, UK and Germany. Hence, there is a big scope for improving the applications of internet to enhance IR websites in the three countries. It worth noting that it was found that companies’ online reporting practices are heterogeneous.

On one hand, websites are advantageous in the fact that they are dynamic and their contents can be changed instantly unlike printed materials like Annual Reports and brochures. Furthermore, websites have no size limits whereas the printed materials have their own limits in terms of size and number of pages (Marcus, 2005). On the other hand, websites come with some specific challenges (Bhojani, 2006). For example, keeping websites up-to-date is challenging. Another challenge is to focus on design of the website and ignore the contents (Silver, 2004). In other words, companies are advised not to place the cart before the horse.