Partners for Financial Stability (PFS) Programwww.pfsprogram.org
Investor Relations Online:Best Practice and Trends inSouth East Europe as well asCentral and Eastern Europe
Presentation of Second Editions of Macedonian Survey
Skopje, MacedoniaMay 19, 2009
AgendaInvestor Relations in SEE
PFS Program SurveysInvestor Relations Online: 2001 - 2009
PFS Program SurveysSurvey of Reporting on CSR: 2003 - 2009
Upcoming Events
About the PFS Program
AgendaInvestor Relations in SEE
PFS Program SurveysInvestor Relations Online: 2001 - 2009
PFS Program SurveysSurvey of Reporting on CSR: 2003 - 2009
Upcoming Events
About the PFS Program
Investor Relations in SEEOngoing, incremental improvements in financial disclosure, in response to national legislation and efforts to harmonize with European Union (EU) legal requirements related to accounting, audit, corporate governance and financial disclosure
Largely domestic investors in most SEE markets; therefore, there is generally a (perceived) lack of demand for disclosure in English
(Perceived) lack of urgency for benchmarking with best practice and international standards in financial and extra-financial disclosure
(Perceived) lack of appreciation of the benefits (internal and external) of an effective investor relations program.
(Perceived) lack of appreciation of the company website as a low-cost platform to market the company, its products/services and its bonds/shares
Nevertheless, evidence from PFS Program regional surveys, country surveys co-financed by the PFS Program and other data show incremental and recognizable improvement in investor relations practices over the medium-term (<5 years) and long-term (5 years>).
AgendaInvestor Relations in SEE
PFS Program SurveysInvestor Relations Online: 2001 - 2009
PFS Program SurveysSurvey of Reporting on CSR: 2003 - 2009
Upcoming Events
About the PFS Program
Background
PFS Program Regional Surveys – Investor Relations Online
Timetable and Universe
August 2001, February 2002, August 2002,
February 2003, August 2003 and February 2004
Eight CEE Candidate Countries for European Union (EU) Membership
August 2004 and February 2005
Eight New Member States of the EU, Bulgaria, Croatia and Romania
August 2005
Eight New Member States of the EU, Bulgaria, Croatia and Romania
Greece and Turkey
February 2006
Eight New Member States of the EU, Bulgaria, Croatia and Romania
Portugal and Spain
August 2006, February 2007, August 2007, February 2008, August 2008 and February 2009
Eight New Member States of the EU, Bulgaria, Croatia and Romania
Brazil, Russia, India and China (BRIC) as well as Ukraine
Background
Country Surveys – Investor Relations Online
2003
Czech Republic, Hungary and Poland
2005, 2006, 2007 and 2009
Croatia
2007
Bulgaria
2008 and 2009
Macedonia
Investor Relations Online: Comparison of Disclosure in Macedonian language
by the Ten Largest Listed Companies in Macedonia (June 2008 and April/May 2009)
with Disclosure in English by Peers in
Bulgaria, Croatia and Romania (2004 - 2009)
Comparison – Macedonia with BG, HR and RO
Comparison – Macedonia with BG, HR and RO
Local Language Website
100%100%
97%97%
100%100%100%
97%90%
93%
February-2009
February-2008
February-2007
February-2006
February-2005
MK
March 2009 --------------70%
June 2008 --------------70%
BG, HR and RO
Comparison – Macedonia with BG, HR and RO
MK
March 2009 -------------------90%
June 2008 ----------------80%
BG, HR and RO
English Language Website
80%83%83%
77%83%
77%83%
77%67%
73%
February-2009
February-2008
February-2007
February-2006
February-2005
Comparison – Macedonia with BG, HR and RO
MK
March 2009 ---------50%
June 2008 -------------70%
BG, HR and RO
List of Management Available Online
77%80%80%
70%77%
73%67%
63%57%
60%
February-2009
February-2008
February-2007
February-2006
February-2005
Comparison – Macedonia with BG, HR and RO
MK
March 2009 -------40%
June 2008 -------40%
BG, HR and RO
Additional Information on Management Available Online
43%50%
40%27%
43%27%
23%17%
20%23%
February-2009
February-2008
February-2007
February-2006
February-2005
Comparison – Macedonia with BG, HR and RO
MK
March 2009 ---------50%
June 2008 -----------60%
BG, HR and RO
List of Board Members Available Online
70%73%
77%67%
73%70%
60%53%53%
56%
February-2009
February-2008
February-2007
February-2006
February-2005
Comparison – Macedonia with BG, HR and RO
MK
March 2009 -----30%
June 2008 ------40%
BG, HR and RO
Additional Information on Board Members Available Online
33%37%
20%17%
23%20%20%
7%13%13%
February-2009
February-2008
February-2007
February-2006
February-2005
August 2003
Investor Relations Online:Survey of Websites
of the 10 Largest Listed Companies in Eleven Central and Eastern European
(CEE) Countries
February 2009
Partners for Financial Stability (PFS) Programwww.pfsprogram.org
Bulgaria Croatia Czech Rep. Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia
16
Investor Relations Online: Survey of Websites of the Ten Largest Listed Companies in 11 CEE Countries
February 2009
Executive SummaryIn the PFS Program’s 16th semi-annual Survey of the Websites of the Ten Largest Listed Companies (by market capitalization) in 11 Central and Eastern European (CEE) countries disclosure of detailed governance information decreased slightly in all categories surveyed.
84% of the companies surveyed provide a list of management online, compared with 88% in August 2008 and 90% in February 2008. 61% of the companies surveyed provide additional information about management online, compared with 64% in August 2008 and 63% in February 2008. 85% of the companies surveyed provide a list of board members online, compared with 91% in August 2008 and 87% in February 2008. 56% of the companies surveyed provide additional information about board members online, compared with 61% in August 2008 and 52% in February 2008.
The survey and this presentation contain the following information:
• Current data on companies in all 11 CEE countries;
• Separate data on companies in eight CEE countries that joined the European Union (EU) on May 1, 2004;
• Separate data on companies in Bulgaria, Croatia and Romania;
• Comparisons of the data from this current survey with data from the previous 15 surveys conducted every August and February since August 2001; and
• Separate data on companies in Brazil, Russia, India and China (BRIC) as well as Ukraine.
17
Survey of Websites of the Ten Largest Listed Companies in 11 CEE Countries
Local Language and English-Language Websites: 2001 - 2009
70%
80%
90%
100%
Febr
uary
-20
09
Augu
st-
2008
Febr
uary
-20
08
Augu
st-
2007
Febr
uary
-20
07
Augu
st-
2006
Febr
uary
-20
06
Augu
st-
2005
Febr
uary
-20
05
Augu
st-
2004
Febr
uary
-20
04
Augu
st-
2003
Febr
uary
-20
03
Augu
st-
2002
Febr
uary
-20
02
Augu
st-
2001
CEE - 11 (inc. Bulgaria, Croatia, Romania)CEE - 8 (CZ, EE, HU, LT, LV, PL, SI, SK)
Local LanguageWebsite
EnglishLanguageWebsite
18
The Ideal Website - Recommendations
Best practice in the European Union (EU) and internationally suggests that the ideal website contains the following information:
• a list of members of management / management board;• a list of members of the board of directors / supervisory board;• a brief description of the educational and professional background of each person;• the scope of responsibilities of each person;• a brief description of functions held by each person in other companies/institutions;• a description on the shares in the company held by each person; and,• a photograph of each person.
Some of these information is available on the websites of many companies surveyed, but all of this information is available on the websites of very few companies. However, the trend is
positive; today more companies disclose this information than was the case in previous surveys.
Investor Relations OnlineThe Ideal Website - Recommendations
Investor Relations Online The Ideal Website – Best Practice in CEE
August 2008
19
The Ideal Website – Best Practice in CEEOn February 15, 2009 52 of the 110 companies surveyed in CEE (47%) disclose
information in all of the categories analyzed in the basic PFS Program survey: local-language website; local-language website; list of management; list of board members; additional information on management; list of board members; and
additional information on board members.
This is a slight decrease in comparison with August 15, 2008 when 56 of the 110 companies surveyed in CEE (51%) disclosed this basic information.
Please note:
On February 15, 2008 51 of the 110 companies surveyed in CEE (46%) disclosed this basic information, compared with
47 of the 110 companies surveyed in CEE (43 %) on August 15, 2007.
Investor Relations Online The Ideal Website – Best Practice in CEE
February 2009
20
The Ideal Website – Best Practice in CEEOn February 15, 2009 52 of the 110 companies surveyed in CEE (47%) disclose
information in all of the categories analyzed in the basic PFS Program survey: local-language website; local-language website; list of management; additional
information on management; list of board members; and additional information on board members.
These 52 companies were analyzed further regarding the above-mentioned ideal website recommendations.
21
Investor Relations Online The Ideal Website – Best Practice in CEE
52 of 110 Companies in CEE – February 2009
BG HR CZ EE HU LV LT PL RO SK SI
0
1
2
3
4
5
6
7
8
9
10
Educational Background
Professional Background
Scope of Responsibilities
Brief description of functions held byeach person in other org/instit
Description of Shares held
Photograph
Investor Relations Online The Ideal Website – Best Practice in CEE
February 2009
22
The Ideal Website – Best Practice in CEE
On February 15, 2009 16 of the 110 companies surveyed in CEE (15%) provide all of the “ideal” recommended information:
• Four companies provide information directly on their company website; and
• 12 companies provide information indirectly through an annual report available online.
Furthermore 13 companies surveyed provide all of the information except one element:
• One company provides all information except for the photographs online;
• Two companies provide all information except for a educational background;
• Three companies provide all information except for a brief description of functions held by each person in other institutions;
• Three companies provide all information except for a scope of responsibilities; and
• Four companies provide all information except for a description of shares held by board members.
23
AgendaInvestor Relations in SEE
PFS Program SurveysInvestor Relations Online: 2001 - 2009
PFS Program SurveysSurvey of Reporting on CSR: 2003 - 2009
Upcoming Events
About the PFS Program
24
PFS Program Survey – Reporting on CSR
Timetable and Universe
August 2003 and April 2004
Eight CEE Candidate Countries for European Union (EU) Membership
August 2004 and April 2005
Eight New Member States of the EU, Bulgaria, Croatia and Romania
September 2005
Eight New Member States of the EU, Bulgaria, Croatia and Romania
Greece and Turkey
April 2006
Eight New Member States of the EU, Bulgaria, Croatia and Romania
Portugal and Spain
September 2006, April 2007, September 2007, April 2008, September 2008 and April 2009
Eight New Member States of the EU, Bulgaria, Croatia and Romania
Brazil, Russia, India and China (BRIC) as well as Ukraine
25
Partners for Financial Stability (PFS) Programwww.pfsprogram.org
Survey of Reporting on Corporate Social Responsibility (CSR) by the Largest Listed Companies in Eleven Central and Eastern
European (CEE) Countries
Warsaw, PolandApril 2009
Bulgaria Croatia Czech Rep. Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia
26
English-language stand-alone ESG Reports – April 15, 2009
0
1
2
3
4
5
6
7
BG CZ EE HR HU LT LV PL RO SI SK
ESG Report
Companies with a stand aloneEnglish-language ESG report -April 2009
Companies using recognizedstandards (i.e. GRI) for ESG report- April 2009
Companies with an ESG reportwhich includes an assurancestatement - April 2009
27
English-language stand-alone ESG Reports – April 15, 2009
Croatia – Zagrebacka Banka, Privredna banka Zagreb d.d., HT-hrvatske telekomunikacije, INA, and Pliva farmaceutika
Czech Republic – Cez, Telefónica O2 Czech Republic, Unipetrol and Erste Bank
Estonia – Tallink Grupp, Tallina Vesi, Merko Ehitus, Norma and Eesti Ehitus
Hungary – MOL, OTP, Magyar Telekom, Gedeon Richter, TVK, FHB and Egis
Lithuania – TEO LT and Lifosa
Latvia – DnB NORD Banka, Latvijas Gāze, Latvijas kuģniecība, Ventspils nafta, Liepājas metalurgs and Latvijas Krājbanka
Poland – PKN Orlen, Polskie Gornictwo Naftowe i Gazownictwo, BRE Bank, Bank Zachodni WBK and TVN
Romania – Petrom and CNTEE Transelectrica
Slovakia – Slovnaft and Všeobecná úverová banka
Slovenia – Krka, Petrol and Sava
28
English-language stand-alone ESG Reports – April 15, 2009
This 12th edition of the semi-annual survey documents the existence of stand-alone environmental, social and governance (ESG) reports for the seventh time.
41 of the 110 companies CEE companies surveyed (37%) issue a stand-alone English-language ESG report on the record date of April 15, 2009.
This demonstrates continuation of an ongoing trend:
September 2008 – 28 of the 100 CEE companies surveyed (25%);April 2008 - 29 of the 110 companies surveyed (26%) ;
September 2007 - 22 of the 110 companies surveyed (20%);April 2007 - 19 of the 110 companies surveyed (17%); and
September 2006 - 14 of the 110 companies surveyed (13%) .
29
Comparison of Six PFS Program Regional Surveys:ESG Reporting in CEE
ESG Reporting in CEE
0%
10%
20%
30%
40%
September2006
April 2007 September2007
April 2008 September2008
April 2009
Percentage ofsurveyed listedcompanies thatpublish a stand-alone English-language ESGreport
30
Comparison of Six PFS Program Regional Surveys:ESG Reporting in CEE
ESG Reporting in CEE
0%
10%
20%
30%
40%
September2006
April 2007 September2007
April 2008 September2008
April 2009
Percentage ofsurveyed listedcompanies thatpublish a stand-alone English-language ESGreportPercentage ofcompanieswhose reportuses recognizedstandards (GRIor other)
Percentage ofcompanieswhose reportincludes anassurancestatement
31
AgendaInvestor Relations in SEE
PFS Program SurveysInvestor Relations Online: 2001 - 2009
PFS Program SurveysSurvey of Reporting on CSR: 2003 - 2009
Upcoming Events
About the PFS Program
32
Upcoming Events
International Seminar
Supply Chain Management
and its Impact on Socially Responsible Investment
Bucharest Stock Exchange – Corporate Governance Institute and PFS Program
Bucharest
June 25, 2009
Investor Relations Seminar
Macedonian Stock Exchange and PFS Program
Skopje
September 2009 (date to be confirmed)
33
AgendaInvestor Relations in SEE
PFS Program SurveysInvestor Relations Online: 2001 - 2009
PFS Program SurveysSurvey of Reporting on CSR: 2003 - 2009
Upcoming Events
About the PFS Program
34
About the Partners for Financial Stability (PFS) Program
The United States Agency for International Development (USAID) established the Partners for Financial Stability (PFS) Program in 1999 as a public-private partnership to help complete reforms necessary to create sound, private and well-functioning financial sectors in the eight Central and Eastern European (CEE) countries that have since joined the European Union. In 2005, the geographical focus of the program shifted to South East Europe (SEE).
East-West Management Institute (EWMI), a New York-based not-for-profit organization, is currently the primary implementing partner.
The PFS Program is mandated to fill remaining gaps in the institutional development of the financial sector in CEE and SEE countries through regional integration and cooperation, selective technical assistance programs and the practical application of lessons learned in neighboring countries. The substantive areas covered under the PFS Program are: accounting, auditing, banking, capital markets, insurance and pension reform. For more information, please visit the PFS Program website at http://www.pfsprogram.org.