1. Completeness. Since comparing information online is relatively easy for investors, if disclosure is weak, it'll be obvious. Companies should be aware of how their disclosure practices measure up, not just to their immediate peers, but to a broader benchmark. Investors' perceptions of completeness are also influenced by the accuracy and quality in both substance and style of the disclosure.

 

2. Verifiability. Heightened skepticism about corporate reporting places a burden on companies to pass a higher threshold of communications proof now. The most credible proof comes from objective measurement, independent third parties and solid substantiation.

 

3. Familiarity. Investors' perceptions of a company's credibility hinges on how well they understand the company's story. The Internet provides a low-cost and effective way to make it easier to understand the business, strategy, objectives and performance metrics; the clarity of the communications is critical to investor understanding. The surest way to achieve clarity is to present information in ways that are familiar to the audience.

 

4. Responsiveness. Credible companies hold themselves accountable to their stakeholders and take their relationships with them seriously. Inadequate contact information, reclusive management and ignoring obvious issues are many IR Web sites' Achilles heel.

 

5. Ease of use. The experience that people have finding and interacting with information on a Web site can influence their overall perceptions of a company. If it's hard to find, use and understand, that creates a negative experience for visitors and can foster a bad impression of a company.

• General Electric Co. is one company that has responded vigorously to the cloud of doubt cast over its reporting practices. For no substantive reason, GE's credibility was called into question following trouble at similarly-structured Tyco International. The issue related to GE's long history of consistently meeting or beating earnings expectations, provoking insinuations that it was "too good to be true."
  
  The response from the then-new CEO Jeffrey Immelt was swift. GE immediately expanded its disclosure and began webcasting its conference calls, a practice it had strangely failed to adopt even though more than 90 percent of U.S. large-cap companies had done so.
  
  Last August, GE took a bold new direction in its public communications with the re-launch of the company's Web site. The old site had focused heavily on GE's financial performance track record and management celebrity; the new site added a dimension that was less obvious on the old site. The new dimension, a primary section of the site called "Our Commitment, " essentially replaces the old and tired "About GE" section. It contains a wide array of qualitative information on GE's activities in areas such as corporate conduct and governance, social and environmental responsibility, workplace practices, innovation and operating culture.
  
  These changes at GE are significant because they cut to the heart of investment decision-making in today's more cautious and less optimistic times. While, prior to Enron, numbers were everything, investors now need added assurance and trust in the management teams that produce the numbers. This is where clear and complete communications of companies' non-financial qualities becomes essential.
  
• Citigroup is also an example of a company that has been forced to react to concerns about its business practices. Amid lawsuits and probes of its Salomon Smith Barney brokerage unit concerning analysts' potential conflicts of interest and underwriting practices, the company found its credibility under fire.
  
  Unlike GE's comprehensive approach, Citigroup's communications were largely reactive and less broad. Rather than adopt an overarching strategy to improve the credibility of its investor relations communications, the company chose to isolate the issues to a subsection of its existing site, naming it, "Information Regarding Recent Issues."
  
  Although the subsection is well organized and shows that the company is responding, the overall message is undermined by deficiencies in other aspects of its online communications. For example, despite Citigroup repeatedly saying it takes corporate governance "seriously," nowhere on its Web site is its corporate governance policy available. Information about its board of directors is also lacking detail and consists merely of a list of director's names and titles.
  
  That said, Citigroup's Web site is exceptional in many other respects, especially its reporting on corporate social responsibility initiatives. The weaknesses cited above are directly related to its financial communications.

• Potash Corp. of Saskatchewan, the world's biggest fertilizer manufacturer is an excellent example of an approach that quickly and effectively highlights the firm's corporate governance practices. Listed on both the New York Stock Exchange and Canada's Toronto Stock Exchange, the company is subject to two sets of requirements and guidelines.
  
  To simplify communications around its compliance with these requirements, Potash uses a handy table format that lets investors see at a glance how the company measures up on governance standards. The corporate governance section also includes video of the board chair and the chair of the nominating and corporate governance committee talking about the board's approach to governance.
  
• Computer Associates' Web site corporate governance section includes a "Highlights" page, which lists the actions the company has been taking in a bullet-point list. Additional details, such as its corporate governance policies and board committee charters are provided in HTML.
  
  
• General Mills Inc. is a good, though less effective, approach. This cereal food giant's corporate governance section provides a high-level overview of the company's policies and practices with greater detail provided via links to abstracts from its latest proxy statement in PDF files.

For every company that is taking steps to address the weaknesses of its disclosure and public communications, many more have been sitting on the sidelines. It is understandable that they might want to stay as far away from the credibility debate as possible. However, by failing to address the real concerns of investors today, these companies are leaving a lot to chance.