Communicating in real time.

• Author: Stewart, Kirk T.
• Position: Corporate communications

More and more companies are using advances in telecommunications and technology to speed up their communications with shareholders.

Corporate America has undergone a managerial revolution in the last 15 years. The revolution has taken place under many banners -- quality, customer focus, creating shareholder value -- but there are two ideas that tie all of these efforts together: 1) do it better and 2) do it faster. To "do it faster," companies have shortened manufacturing cycles, reduced delivery times, sped up their financial reporting, and eliminated management layers to ensure quick response to customer demands.

While the concept of "doing it faster" has energized the factory floor, the distribution system, and the executive suite, it has only recently begun to change the way companies communicate with their shareholders. Public companies still follow Stone Age procedures revolving around an annual report (usually mailed in March for a fiscal year ending December 31), an annual meeting (held in May to discuss results of the previous year), and distribution of quarterly reports (usually four to six weeks after the end of the quarter).

More and more companies, however, are taking steps to speed up their communications with shareholders, eliminating production of glossy shareholder publications that wind up going unread after arriving in shareholders' hands many months after the fact. Advances in telecommunications now make it possible to communicate with shareholders so quickly that even the next day's Wall Street Journal is somewhat dated.

For instance, we now routinely distribute our clients' earnings releases via one of the major electronic services such as PR Newswire or Business Wire rather than through the mail or by hand. Not only do these services go directly into almost all major news-rooms, they go directly into an increasing number of institutional investors' research departments. Investors get the full text of the release as it's issued, complete with a company contact.

While this puts major institutions at an advantage, the individual investor can take advantage of all-day financial broadcasts on CNBC, as well as an astonishing variety of on-line computer services that go a long way toward eliminating the institutional edge. At Manning Selvage & Lee, we counsel our clients to distribute information electronically whenever and wherever possible. "Turbofaxing" to lists of up to several hundred institutions has been the...