Thank you Stefan,

Actually, I had not even looked at it from that angle, that is, the roles that index investing and algorithmic trading are having on shareowner supervision of companies.

The issue we now face is that since these are now effectively irreversible facts of the investment landscape, how do these non-traditional shareholders maintain supervision over companies during the duration of their ownership or holding?

Do you foresee an outsourcing of supervision to third parties who monitor these companies to ensure that they do not breach certain expectations of these shareowner groups? Is that a probable business model? Does it/can it deliver value in any way?

The increasing elongation of the arms length between shareowners and managers seems to be a natural consequence of the advance in markets. With new instruments and investment vehicles, the orthodox shareowner whose name appeared on a share register long enough to build a relationship with may be going the way of endangered species. Is that true? Do you agree?

Deretailization is one thing and has been extensively discussed. But what you refer to is another, that is, the effect of new trading trends on ownership patterns and shareholder engagement.

I would like your thoughts on the subject and pointers to anyone else covering the topic.

Once again, thanks for your usual insightful comments.

Obi

I agree with the interviewer,

Companies need to spend more on pharmaceutical research.

Rather than chasing more deals, companies should invest in developing drugs that will save lives and transform futures.

To the team at Valueclear Journal, please keep up the stellar job.

O.T.O

This is a test comment.

I agree 100% with the writer.

The stories are all completely false.

Thank you.

John Doe
Lagos.

You hit the nail on the head Stefan,

Companies should aim for a fair valuation and not the dubious aspiration of 'share price maximization'.

Any so-called IR professional who claims to be able to maximize a company's share price is a snake oil salesman, and the company that engages his services should know better.

Seriously, the point you raise underlines the need for true IR professionals to redouble efforts at raising awareness about the realizable goals of of an investment community engagement program.

Until we as IR practitioners do that, the confusion between reputable IR and market hucksters will continue to persist in the mind of many company executives who make unreasonable demands about 'maximizing the share price.'

Thank you.

Thanks for the observation Stefan,

Yes, it is true that senior executives at public companies would sooner cry foul when they feel that their shares are undervalued and not when they know they are overvalued. It is a bit of a paradox of sorts that the same improved clarity on the financial surplus creating potential of a firm can cut both ways: to lower the valuation or to raise it.

Ultimately, even for investors in those companies command 'undeserved' trading multiples on the market, an improved information environment is far better than one of poor visibility because it allows them to judge each company on the merits of its own business, rather than unsubstantiated or generalized assumptions of its sector, peers, region or capitalization.

Thank you,

It is an honour that you found some of the ideas and suggestions in the post potentially useful to TransCorp.

Obi

Thanks for your kind and supportive comments Niyi,

Immensely appreciated.

We will work hard to live up to expectations.

Obi

It is instructive that at a time when companies, particularly financial institutions, need to be communicating more and better, they have chosen to recoil into their shells.

Understandably, corporate culture, which is human nature writ large, does not adapt easily from a cycle of communicating mostly positive news in the 2002-2007 boom years, to admitting that a lot of the decisions that were taken then are responsible for the mess that they are in right now.

In my view, it's about more than write-offs and missing quarterly estimates. What this is really about at many companies is the mea culpa: that just when Icarus thought he had learnt to fly, the sun melted his props and he came crashing down to earth.

If we approach this as a problem with numbers falling short, then we might miss the thread of the narrative, the moral of the story. Communicating performance, any type of performance, involves speaking about who you are, with an active involvement of the ego. And right now, I am not sure that when many banks look in the mirror they are quite sure of who they are. Many hardly recognize themselves. How do you describe your own performance, when you are no longer who you thought you were?

It's good to see social media usage spreading in the investor relations space. This is one step for eBay, but a huge leap for the investor relations profession. Companies like AMD, Dell, eBay, Intel, Microvision and Sun are pointing the way to the future by using new communication media.

Most of these initiatives would have been unthinkable a few years ago, perhaps even heckled out of the room, when the newswire services had a total hold on the broadcast of these kinds of information. It's good to see the shift from one way broadcasts to multi-way communications that tools like Twitter afford.

I certainly hope this is a trend and not a fad.

Well done to Richard and the entire eBay investor relations and corporate communications teams.

Excellent guidelines Monte. Quite helpful in my current role.

I'm doing a survey on how companies in Nigeria can use Twitter and obstacles to its adoption. Even if these companies learn about the service, a major hurdle would be inability to port those posts to SMS since that service is not available locally.

A second major hurdle is that since most local companies don't see the need to engage outside of mainstream media, they are unwilling to commit the resources to hire people familiar with the social media idiom. Companies that fail to update their websites will simply not be motivated to post regularly on blogs or Twitter. It would require a sea change in the culture.

A third obstacle, in my view, is the rational procrastination argument: how many of our customers and investors actually use that medium? Since these companies do not understand the viral nature of social media and networks, they are deaf to the counter argument that all it takes is one light to start a bush fire.

I'm eager to see how such attitudes will change over the next two years.