Corporate websites in Africa: Has online investor relations communication improved during the past four years? Evidence from Egypt, Kenya, Morocco, Nigeria and Tunisia

Background: Investors require detailed financial and nonfinancial information to evaluate investments. This information is available in various forms (e.g. hard copies, published media, broker and investment consultants and corporate websites). Corporate websites have the potential to be both a one-stop-shop for investor needs and an efficient cost-effective medium for companies to communicate with investors. As previous research (Baard & Nel 2006) showed unacceptable low levels of Internet presence in selected African countries compared to other international companies, including companies in South Africa, a follow-up study was undertaken. An improvement was expected given the rapid increase in Internet users, improvements in infrastructure, the arrival of wireless access technologies and lower tariffs.

Objectives: The objectives of this study were to measure the availability of corporate websites and dedicated investor relations (IR) sections; to evaluate the content of IR information communicated and to compare findings with previous research.

Method: For ease of comparison this study has evaluated the same 40 companies in each of the countries, namely Egypt, Kenya, Morocco, Nigeria and Tunisia that were evaluated in the 2006 study. A number of steps were taken to find the websites after which all the working websites were screened and evaluated against a checklist of international best practices.

Results: Although improvements were apparent, 19% of the companies in the study still do not have websites, 20% do not supply financial information on websites and a significant number of companies do not optimally utilise websites according to international best practices.

Conclusion: Notwithstanding improvements, a significant number of companies do not optimally utilise their corporate websites to communicate to investors. Possible reasons were discussed (e.g. necessary skills, available technology and cost), but it was concluded that companies are probably either negligent, do not regard it as important to communicate information to investors via corporate websites, or do not realise the benefits of communicating company information in this manner.

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