Volga | Finance, business

On information disclosure by public companies

5 Feb '10
Source: Group Finances

According to the Russian law any public company is compelled to disclose essential financial and other information to broad-based stakeholders, including shareholders, government authorities, securities market players, etc. Companies normally do that through media releases and/or targeted messages to authorities and shareholders.

A public company is obligated by law to draft and publish the following financial documents: annual and quarterly reports, decisions on securities issues, and securities offering circulars. In addition, subject to disclosure are all aspects and events that may directly or indirectly influence the worth of securities.

A corporate website is an important PR channel today, critical for the above matter. It must contain the following information:

- a public companys development strategy;
- organizational structure, corporate governance;
- operation financials (annual and quarterly reports);
- market research;
- press releases and presentations by key executives;
- corporate calendar (meetings with investors, press conferences, etc.);
- Investor Relations (IR) contact info.

The website must be regularly updated. Shareholders and securities market players should have access to information bulletins and corporate newsletters through subscription.

Alongside obligatory information mandated by national law and stock exchange regulations a public company may publish additional data for analysts and investors to better see the firms competitive advantages.

This may include information other than financial, such as the quality of products and services offered, characteristics of a client base, whether or not employees and clients are pleased with the firm, etc. In doing so a company must stick to the fundamental IR principle of disclosing truthful and adequate information in its entirety. No matter what data is chosen for optional disclosure, it must be consistent and regular, even if it contains unfavorable results. This is the only way of making this additional information a tool to forge investor trust.
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