Investors today are overloaded with information, and it's getting harder and harder to sift through it all to make an educated decision. It used to be you studied the annual report and that was it. That's changed.

With the glut of information out there, smart companies know that investor relations (IR) counts equally or perhaps more so than the actual numbers within the annual report. The is because the best investor relations websites, and by extension their investor relations programs, are so much more than static pages of information. They are an additional opportunity for companies to sell themselves and their products to the world. The good ones, where applicable, should be able to obtain both your investment and personal purchases, creating a win-win situation out of a casual interaction. Now that's powerful.

Hardly Anyone Understands This
According to Dominic Jones, principal of the IR Web Report, the online annual report season has come and gone with little fanfare and much disappointment. The SEC now requires large companies to provide investors with annual reports and proxies that are both convenient to read and print. It appears many have not done so despite the government agency's insistence. As someone who spends a large portion of each day poring through documents like 10-Ks and DEF 14As, I can vouch for this assessment. I personally believe companies do this on purpose to avoid painting an unflattering picture of the company. If you have bad news, hide it in the fine print where even the professionals will have a hard time getting at the truth. It's frustrating, but all is not lost. (To learn where to find the telltale signs of corporate misdeeds, check out Footnotes: Start Reading The Fine Print and Five Tricks Companies Use During Earnings Season.)

Some Companies Do Believe In Two-Way Communication
A positive trend is the use of interactive annual reports, which do a superior job of educating investors about the corporate story while updating them about the progress made towards future goals. While expensive, they create a better relationship with investors of all kinds. Large financial printers like Bowne & Co. (NYSE:BNE) are working with their biggest clients to help them implement the new XBRL (eXtensible business reporting language) interactive data requirements for all financial reports on or after December 15, 2008. According to Bowne, 500 companies will have to meet this deadline. I suspect it's going to be touch and go.

Enlightened companies like FedEx (NYSE:FDX) are using awards such as the IR Global Rankings to stand out among other large companies. The IR Global Rankings covers the best of the best in investor relations around the world. The top-five United States winners in 2008 are FedEx, General Electric (NYSE:GE), Yum Brands (NYSE:YUM), Kellogg (NYSE:K) and Proctor & Gamble (NYSE:PG). Winning an award like this says to the public that the company cares about its investors and will do everything it can to keep people abreast of what's happening at the company. In my mind, why be a public company if you're not willing to communicate with investors?

Who Else Is Doing A Good Job?
Many international companies like oil & gas producer Petrobras (NYSE:PBR) use the awards to generate attention from U.S. investors that otherwise might be focused on homebound stalwarts Exxon Mobil (NYSE:XOM) or Chevron (NYSE:CVX). Even small-cap companies like Global Sources (Nasdaq:GSOL) are getting in on the action. Global Sources is a media business providing Chinese sourcing information for large buyers outside China does. With many investors dubious of Chinese businesses, an award like this can act as a stamp of approval.

Who's Not?
When economic times are challenging, public companies need to be more transparent, not less. Unfortunately, many retailers are choosing to hide from investors instead of candidly painting a picture of their current difficulties and the plans they have to address these business concerns. Same-store sales, once a monthly reporting ritual, have become less common. My suggestion to investors is that if a company won't provide monthly sales, it doesn't have control of its business, and shouldn't be on your watch list.

Bottom Line
Firms nominated for investor relations awards between the years 2000 and 2002 had abnormally high stock returns in both the year prior to and after the recognition, according to a 2008 study "The Impact Of Effective Investor Relations On Market Value". The authors of the study concluded that effective investor relations translated into higher market values. Need I say more?

Learn how to gather all the pieces before you start to put together you puzzle, in The Flow Of Company Information.