Directors

l.o.jones8686

I frequently invest in the equity markets, predominantly on the London Stock Exchange.

Through my line of work, I get to meet numerous CEOs and you get a real feel for how they run the business and the effects their leadership will have. This has led me to invest in several select companies and my results have beat the market by several fold.

My point is that management are so critical to the fortunes of a company but everyday investors (private investors) generally don't ever get the opportunity to speak with the directors or CEOs. My question is that do you think directors and CEOs should make themselves more accessible to everyday investors?

colsten

Everyday investors probably invest in funds rather than in shares in individual companies. The majority would also not have the time / skills to meet with Directors.

l.o.jones8686

Good point Colsten. The majority of funds though charge quite material management fees, even if the portfolio does not perform.

I am an everyday investor and I have outperformed consistently in comparison to the vast majority of funds through stock selection after having discussions with management.

I think that a lot of investors are surprisingly knowledgeable. Do you think that directors should attempt to make themselves more accessible, perhaps via Google Hangout where a director could give a video presentation/interview and lots of investors could log-in?

noggin1980

This feels like we're heading for a can of meat.

colsten

No, I don't think they should. Their time would be much better used in pursuit of creating value for shareholders, or in taking some time off to play golf or with their children.

l.o.jones8686

Noggin, what do you mean can of meat?

Colsten - Yes, time resources are very important. I do know that some directors spend in excess of a month some years conducting investor roadshows. However, these are predominantly to PCBs who act on behalf of everyday investors.

Wh not just speak to investors directly? It seems to me that if CEOs did something like a interactive webcam every month for an hour, it would be a lot more time effective.

Also, it seems to me that directors do not make themselves accessible enough. If they did, many investor's would benefit from this greatly.

AlanP_2

l.o.jones8686 wrote: »

Noggin, what do you mean can of meat?

SPAM.


Don't take it the wrong way though as I am not saying you are a spammer, but many spam threads start with the sort of general question and "my system is wonderful" comments.

As for the question. One hour p/m to lots of investors might work if it was a presentation style forum but individual Q&A would be difficult.

dunstonh

Wh not just speak to investors directly? It seems to me that if CEOs did something like a interactive webcam every month for an hour, it would be a lot more time effective.

Directors do speak to investors. Those with sufficient holdings in teh company with influence. However, a director cannot waste their time dealing with small holdings and there is enough info available for those.

bowlhead99

l.o.jones8686 wrote: »

Colsten - Yes, time resources are very important. I do know that some directors spend in excess of a month some years conducting investor roadshows. However, these are predominantly to PCBs who act on behalf of everyday investors.

Wh not just speak to investors directly? It seems to me that if CEOs did something like a interactive webcam every month for an hour, it would be a lot more time effective.

The CEOs who speak to analysts and brokers and fund managers and significant private investors would still have to do that because all those parties - who control most of the available capital - demand to meet in person, press the flesh, go on a tour of the plant, and generally satisfy their curiosity away from the public eye that they would get at an all-investors conference.

Where companies report to investors quarterly or semi-annually, there are sometimes conference calls or webcasts in which the contents are discussed - this varies from company to company. On such calls, the companies are careful not to release information that was not already announced in their report or released by way of a sameday AGM statement, for example. But it can be interesting to see how they respond to questions.

However, to increase that reporting and discussion frequency to be on a monthly basis is burdensome, unless you are just going to have three monthly calls in a row which talk yet again about the figures you released at the beginning of the quarter. Most companies would not want to release new data every month, not least because their competitors are not obliged to do so - everyone follows the same regulations and timescales when it comes to releasing information to their investor community, and it is expensive and prohibitively resource-hungry for some companies to commit to more frequent reporting. It is not about simplicity of running a webcast, conference call or assembly-room presentation, but actually creating the content that goes with it.

If you propose an open season, anything goes "CEO's Question Time", there are few CEOs which would relish that level of exposure, especially if it is to involve non-sophisticated investors who don't understand how financial statements, capital markets, tax or the business model actually works. It is a distraction from running the business and - as those with lots of money to invest can already get access to the CEO - is unlikely to widen the net to raise material amounts of new capital.

You mentioned on your previous thread:

If there was a portal for investors to be able to speak with management, it would give them the edge over other investors as they could base their decision on management as opposed to analyst forecasts.

Of course, receiving nonpublic information would make them an 'insider' and restrict their ability to buy and sell. While receiving public domain information would not give them an advantage apart from over that small portion of the investor base who didn't bother to get the public domain information. Where is the 'edge' created by a portal for anyone who is interested to get together to hear what the CEO wants to say?

Noggin, what do you mean can of meat?

You are aware perhaps of that Monty Python sketch involving a canned meat product which inspired the internet community to adopt that brand name for people who showed up to a forum, asked a couple of inane questions that they didn't stick around for the answers to, and then proceeded to drive discussion on their succesive threads towards their 'CEO/investor portal' business opportunity?

AndyT678

IMO the management of multi billion pound enterprises should focus their attention on running their multi billion pounds enterprises not on schmoozing some idiot who may or may not throw a few hundred quid into the pot.

somethingcorporate

If every minor investor wanted to talk to a CEO how much time do you think that CEO would have to run the company?

Not much....