WEB SITES FIRST POINT OF CONTACT WITH COMPANIES FOR INVESTORS, SAYS SA STUDY
Web sites are often the first point of contact for an investor when dealing with big corporations. However, some of the biggest companies on the JSE are still lagging behind in the development of their sites.
Gencor, Richemont Securities, Pick ‘n Pay, Johnnic and RMB Holdings all scored in the bottom 10 of the 100 top listed companies surveyed in an annual study conducted by research company BlueRiverstoneStone. BlueRiverStone MD Ian Kruger says the project tested companies’ ability to provide information relevant to the investor via the online channel.
"The study looked at the two elements of the online channel, the company’s corporate Web site and its e-mail communications, which make up the majority of the online experience. The Web site contributed 75% and e-mail contributed 25% of the score."
The Web sites’ usability was measured by looking at how efficiently they provided six pieces of information as well as the number of clicks taken to do so. The required information included details on corporate governance, the historical share price, profiles of executives in the company as well as news content. The ability of each company’s annual report to reach diverse audiences was also assessed and the "look and feel" of the Web site was taken into account.
BlueRiverStone also analysed the best 12 and worst 10 Web sites using software supplied by eValid (e-valid.com), a Web site analysis firm.
E-mails were then sent to the companies asking for the name of their transfer secretary, when the company’s financial year ended, whether a copy of the annual report was available in electronic form and information about the company’s policy on corporate governance.
Kruger says six of the companies assessed did not have Web sites. "Caxton Publishing and Print, Real Africa Holdings, Sycom Property Fund, African Life, Assurance, Growthpoint Properties and Mvelaphanda Resources did not have Web sites, with only one company &SHY; Canadian Overseas Packaging &SHY; being unreachable by either Web site or e-mail."
He says of the 100 companies surveyed, 21 companies including Gencor, Richemont Securities, Pick ‘n Pay, Johnnic, Absa, BHP Billiton, Old Mutual and Santam, did not reply to the e-mail, while Investec, Afgri and Remgro e-mails bounced back.
There were some star performers on the index as well. Gold Fields moved from ninth to first, keeping out IT firm Comparex, which remained in second place for the second year in a row.
Petrochemicals giant Sasol shot from 19th to third, while new entrant Investment Solutions took fourth place. Naspers shot from 58th last year to fifth and last year’s winner, Coronation, fell to eighth place.
Kruger says the results of the survey show that while companies are starting to take their Web sites and e-mail communications more seriously, few are using both these communication media well.
"Without a more detailed study it is difficult to say for sure, but the scores seem to indicate that the improvements that companies made were more of a technical nature than from providing improved content. This means that companies have a good opportunity to really impress the investor by adding only a little more content and by better understanding the way in which investors use the online channel."
He says the analysis of the e-mail scores shows that the majority of companies were quite conservative about providing information via e-mail, providing the barest minimum, while most referred the user to the annual report.
"The most likely reason for this is that the people responding to the e-mails are not necessarily equipped to give satisfactory answers to the questions, hence the referral to the annual report.
"The corporate governance question was particularly badly answered with only Sanlam providing a comprehensive answer," he says.