Corporate Eye

...compare, compete, excel

Archives for December 2008

Visualization and Corporate Governance

I wrote a post about Business Visualization regarding how companies are using images, graphics and unique visuals to convey complex issues and to solve problems. Since I also write about Corporate Governance, it seems obvious to combine the two subjects.

I found some companies that are using creative visuals to explain their Corporate Governance systems. Perhaps the most elaborate is used by the Sharp Corporation, a technology and electronics company based in Japan. Sharp uses this visual to explain their Governance system (see right).

You can access the full visual and a brief overview on Sharp’s site. Even with this smaller version, you can observe that Sharp does a remarkable job in describing the relationships among the Governance components. Note also, that they indicate the date the chart was updated. 

Another noteworthy feature of Sharp’s website is the About Us section. Seldom have I seen such a comprehensive display of Corporate Governance, Investor Relations and Social responsibility all on one page.

TD Bank Financial Group takes an acknowledged simpler approach —

This visual is easy to grasp and TD also provides a brief narrative summary to accompany the visual.

TD also does a great job explaining their business units. The Corporate Profile section provides visitors and investors with a clear explanation of what the company does. This is another example of a company that enhances communications with their stakeholders.

Grupo Nueva a private holding company in Chile, uses a conceptual approach to their Governance visual —

This is a creative method and is effective. Grupo Nueva simply and effectively explains the components and their relationships.

I also like the minimalist “look and feel” of their website design. It enhances the communication ability of the site.

Visuals done well help to communicate and clarify processes, ideas and more. They are very effective in Corporate Governance.

What Good Are Those IR Awards?

If you’ve ever found yourself off the IR awards list (or the short list, for that matter) your reaction was probably something along the lines of, “Well, they’re just beauty contests anyway and they really don’t signify much”.  I know, I felt pretty much that way when I practiced investor relations on the corporate side.  It seems there just were not enough trophies to hand out to all of the campers.  

Unfortunately, I’m here to tell you that there is actually academic research that shows that being nominated for investor relations awards can help your stock price.

In a March, 2008 working paper, Professor Richard J. Taffler of The Management School, University of Edinburgh, together with Vineet Agerwal, Angel Liao and Elly A. Nash authored a study entitled “The Impact of Effective Investor Relations on Market Value”. In their study they use nomination for IR Magazine’s “Best Overall Investor Relations” awards over a three-year period as an indicator of quality investor relations. Their study shows that firms that are seen as having effective investor relations, as indicated by being nominated for the awards, earn superior abnormal market returns both in the year of nomination and the year following the awards.

The part of the study that is of the most interest to me is the quantification the authors put on the abnormal risk adjusted stock returns earned by firms in the year following their nomination for an award. The results show that all nominated companies earned 80 basis points per month superior market returns. When you compound 80 basis points per month over a full year, the result is an excess return of 10%.

So while the awards may be a beauty contest, they appear to be one where there is genuine prize money at the end.

$5 Billion in Savings Up For Grabs for Consumer Packaged Goods

How can the consumer packaged goods industry save $5 billion per year?  Drop down to just 6-colors for package printing.

Sounds simple enough, but when even the slightest edge in terms of recognition and attracting attention on overcrowded store shelves can make or break a product, dropping extra colors in the package printing process can be a big deal. 

Enter LFH.  The brand identity consulting company out of the U.K. created a patented system that it uses to analyze the colors in a package design and then provides a reduced color palette that creates almost the exact same look.  In fact, a survey of marketers conducted by LFH showed that 8 out of 10 could not tell the difference in packaging before and after LFH modified the color palette, and the final 2 stated that the difference was was barely noticeable.  [Read more…] about $5 Billion in Savings Up For Grabs for Consumer Packaged Goods

The Secret to Success for Social Media Sites

What is it that can make a social site like FaceBook or MySpace unquenchable to other heavy Internet competitors? What keeps these sites from going under when a new, more fun and exciting site is launched and (seemingly) everyone goes over to the new kid’s playground to play? How can social media sites make themselves unstoppable? What is the key?

Digg, Stumble and Twitter, Oh My!
There are only a handful of social media sites that are so common, you don’t even have to offer an explanation of who or what they are when used in a sentence. Sites like Digg, StumbleUpon and Twitter have become so entrenched in the mental landscape of Internet users, that to even think of using a different site can be almost offensive to people. Users find what works best for them, use it to its maximum and passes the word along to others. There are very, very few sites that can tout this user-loyalty, and, never will they say that it was an easy task to win the hearts and admiration of their readers.

The one notable factor that these social media sites can say resonates, among other factors, is their dedication to consistency. Users can be very serious, and rightly so, about their technology and their expectations of it. In other words, they want it to work when they need it and want it to work. Outages are understandable, periods of down time are also understandable, but users can be unforgiving when a site promises one thing and fails to deliver. Or worse, they deliver something altogether different.

Gauging Consistency

The secret to success for social media sites is not a mystery. Consistency is key and the ability to fully deliver the product is desirable and demanded. Sites like Twitter have enjoyed immeasureable success because they have harnessed the ability to remain consistent yet flexible in a fast changing social media world. How can that be? Twitter boasts the 140-character micro-blogging interface where users can make snappy, quick posts multiple times in a day or at one sitting. They have never veered from that platform. They have not implemented any other tool that would take them from the premise that they are “quick and easy.” They have not included the ability to upload videos, display photos or images or even the option to upload a podcast. They have not tried to market themselves as a full-service blog, and therein lies the beauty of their micro-blogging platform. They keep it simple. Of course, if users desire more, they are welcome to find other programs and platforms that fit their needs. However, part of the success that I’m speaking of is utilizing a particular platform for what it is specifically intended for to its maximum use.

How can your social media presence be successful? Deliver your goods promptly and as accurately as possible without veering away from your purpose. Simple as that. Users want what they want and expect you to deliver just what you say you will. Give them anything different, and they will seek consistency in other areas.