Investor Relations the biggest challenge for Europe's largest companies
By Helena Wennergren and Freja Nilsson
Once again, we've evaluated the corporate websites of Europe's 500 largest companies by market capitalization to see how they are meeting the needs of their stakeholders. Despite a slight increase from last year, companies continue to deliver less than half of the content that users expect to find and still seem to think that it is enough to present information in annual reports.
The summary of our findings - quick read
The major challenges for companies relate to Investor Relations, shares, and careers information. The IR and information about shares that is missing is often available in annual reports, which makes it more difficult and time-consuming for website users to find. Whilst jobseekers want to have a better understanding of what it is like to work at a particular company and would like more stories from employees, as well as data from employee satisfaction surveys. On a positive note, as companies have started to present environmental and social data to a higher degree, we've seen an increase in sustainability and governance information.
Companies rely too much on annual reports for IR information
Information related to Investor Relations is the weakest link on corporate websites. This year, the fulfilment of necessary IR information is merely 25% among Europe's 500 largest companies, a slight decline of 2 percentage points from last year. According to analysts, investors and business journalists, it is critical that information on financial targets, achievements, and outlooks are presented on corporate websites. Unfortunately, only 22% of the 500 ranked companies state which financial goals they aim to achieve on their websites.
In our review of annual reports - Annual Report on Annual Reports - we see that an increasing amount of companies present both financial targets, achievements, and financial outlooks. Companies seem to be content with offering the information solely in the annual reports. However, this is not enough. 93% of respondents in Comprend's Capital Market Survey 2021 find financial targets on corporate websites important. The number for outlooks is 95%. By making the information available directly on the website, the data is easier to find after the annual report's immediate release.
Top 5 performers in IR
1.Terna 100% 2.Poste Italiane 98% 2.Snam 98% 3.Mediobanca 95% 4.Swedish Match 94%
Terna present their financial targets and target achievements in a simple but effective way.
Your approach to remote working
Jobseekers use the corporate website to understand the company better and form an opinion of whether the company could be a potential employer. The Careers section is vital for this, especially in terms of learning more from the people who work at the company through testimonials and results from employee satisfaction surveys. Companies are fairly good at introducing themselves as an employer but could do more to present both employees and facts from surveys.
A new criterion this year is the company's approach to remote working. Many of the experienced jobseekers might have changed their way of working and expect to work from home or other locations. Regardless of what the company offers, it is essential to present their approach to remote working in general.
Telenor do an excellent job in presenting their approach to remote working with a statement from the CEO, stories from their employees and an FAQ describing more details of how it works.
Top 5 performers in Careers
1. Terna 93% 2. Poste Italiane 89% 3. Total 88% 4. Generali 85% 5. Volvo 82% and Eni 82%
ESG gets greater attention
Stakeholders' interest in ESG has increased over the past few years, so it is pleasing to see that companies have improved their sustainability communication. The average score for sustainability information has increased by 13 percentage points in the past 5 years - companies are now at an average of 46%. Governance information has improved to 43% this year, from 37% last year.
So what is it that stakeholders want? Well, the capital market is always interested in data - figures and time series that show companies' environmental and social work overtime. More companies are providing this, and many present an interactive tool in which the user can select what key figures to show and in which format. Generali do well in offering both environmental and social data in a time series over the past years.
However, the number of companies that present their sustainability strategy still exceeds those that offer the actual data. 92% of the 500 companies present their sustainability strategy. Those that also mention real actions related to the strategy are fewer - with 52%, and 44% showing their sustainability targets. Additionally, jobseekers also find sustainability information essential and want to know how companies contribute to society.
Top 5 performers in Sustainability
1. Intesa Sanpaolo 100% 1. Terna 100% (1) 3. Eni 98% 4. Poste Italiane 97.5% 4. Repsol 97.5%
The G in ESG
Being transparent with governance information ensures accountability and openness in a company's finances for the long-term benefit of stakeholders. Comparing the 20 largest companies in the Europe 500 list, Finnish companies have the highest average of 72%. The Italian companies follow at 63% and Sweden at 61%.
The profiles of the board of directors and management team are of great importance to gain trust among investors. 93% of stakeholders find the leadership team experience crucial when making investment decisions, so it's necessary that CV's are available.
Orkla present their Executive Management Team in an excellent way, providing a good overview of the team as well as detailed CV's with pictures and updated information about the number of shares that the person holds. For many of the team members, a link to their LinkedIn profile is also available.
Who is best at what?
Different countries have different strengths. When comparing the 20 largest companies in each country, Finland is unbeatable in terms of Governance, but also has the highest average scores in information about shares, reporting, Investor Relations and press. The Italians have the highest scores in sustainability with 66% fulfilment. Jobseekers are likely to prefer companies in Germany and Finland as these top the Careers section with 55% fulfilment. British and Swedish companies are strong in features and functionality - the Brits also have the best average score for site architecture and navigation.
Terna remains at number 1, continuing to increase their score to a record high of 95.9 points out of 100, increasing their score by 3.1 points. Snam is, for the third year in a row, the first runner up with an impressive 91.6 points. Poste Italiane is new to the podium with 89.4 points - up one position and 4.1 points.
The best non-Italian company is Swedish Match in 6th place with 83.8 points.
The highest climber among the 500 largest companies in Europe is German HelloFresh who increased their score by 15.3 points to a modest 34.9 points. As we rank additional companies in selected markets, it's worth mentioning the highest climber among all 746 companies is another Italian company; A2A, with an increase of 24.8 points to 81.4 in total.