Please Don't Read Our Report

I read Dominic Jones’ piece on Moody’s Corporation today and it really struck a cord with me regarding my last piece. His piece Dear Moody’s Corp: Type this fast 3 times discusses how some companies send out annual shareholder materials.

The point Jones is trying to make is that the system is severely flawed. Jones paraphrases the SEC who notes that the “process for the delivery of annual meeting materials, companies can mail their shareholders a slip of paper containing a URL where recipients can access their proxy materials online.” The piece went on to explain that Moody’s Corporation was doing just that and sending their shareholders a piece of paper with an unnecessarily long and complicated URL and very bland instructions. Additionally, once a shareholder actually made it to the site, the document and site are set up very poorly and offer practically no navigation through the tedious 214 pages.

Jones also makes good points when he brings up that Moody’s should at the very least be shortening the URL and taking steps to ensure its shareholders reach the site. He also says that the SEC is not doing it’s job and is allowing theses “materials [to be] in half-baked, barely usable formats” and are “akin to a root canal.”

I think Jones brings up very good points and I agree with him completely. I just would take it a step further to imply some other things. By sending out your annual shareholder materials in the way that Moody’s has, they are basically telling shareholders, please don’t look at our report. We are going to make it as difficult as humanly possible to find, read, and understand the material. It almost makes one wonder if there is something in there they do not want shareholders to read or if they just simply do not want any shareholder input and this is their way of trying to keep some quiet.

Perhaps I am wrong and this is simply a case of ignorance and a company that does not fully understand the capability of the technology available today. This may be an actual possibility, especially after seeing how poorly laid out and navigable Moody’s website is.

The problem becomes a lack of transparency, which I feel is essential for all companies especially those that frequently deal with their investors. What Moody's has done is about as legally close to being opaque as a company can be.