Report from the east

Last week I attended Bank of New York Mellon’s DR Issuers’ seminar in Moscow. It was an event directed at Russian DR companies and among the 200 participants were IR professionals from Lukoil, Uralkali, Norilsk Nickel and other Russian companies.

The agenda focused of course on how Russian companies can improve their relations and communications with stakeholders. The Russian market is quite special. There are huge companies, and Russia is the world’s largest DR (depositary receipts) market by market cap. Still, the main market is local for many of the companies. Bank of New York Mellon presented their annual IR survey, which is global, and can be found on their website: http://www.adrbnymellon.com/IRSurvey.jsp. It showed some interesting facts about both IROs worldwide, and in Russia specifically.

Investor communications best practice panel

I was fortunate to participate in a panel on the topic ”Best practices in Investor Communications” together with representatives from M: Communciations, Taylor Rafferty, Bank of NY Mellon and Thomson Reuters. Many of the questions we received from the audience was about crisis situations. How do you handle something that you cannot predict?

Risks and crisis situations

The panel agreed that the response to that is that you can predict up to 90 % of crisis situations. BP MUST have discussed the risk of something like the Deepwater Horizon situation; in companies’ risk plans they have to consider risks in the business, risks that might appear due to key staff or external factors that affect their business.

Online communications – lack the tradition of sharing and transparency

My perspective in the panel was of course the online. Russian companies aren’t leading in online corporate communications. Looking at the Russian results of H&H Webranking 2009 (the 2010 result is not official yet, about to be announced soon) – the average score of Russian companies was approximately 30 points, while the Europan average was then just above 48 points.

My theory, which was confirmed at this event, is that Russian companies don’t have the tradition of sharing information – not internally and not externally. And as IR website best practice is mainly about being transparent and sharing information with your stakeholders, it requires a change of mindset among the Russians. Especially for those companies that want to compete internationally, and that have international stakeholders in analysts, shareholders, media etc.

However, I know that some of the Russian companies have quite high ambitions with their online corporate communications, and I don’t think it will take too long until some of them will take a big leap and be as good as the top 50 companies of H&H Webranking. I look forward to that!

Btw – here is my presentation from the event: