Investor relations policy

A material fact reaches every investor at the same moment, or it reaches none of them. An investor relations policy is the instrument that holds an issuer to that rule: it names who may speak to the market, on what, and when. Woodfine has not adopted one. Of the instruments described in Corporate Governance Documents, only the audit committee charter is currently in place.

This article sets out the framework Woodfine intends to adopt to regulate the flow of information between a reporting issuer and the investment community: analysts, institutional shareholders, individual investors, and financial media. Such a policy would create no disclosure obligation that securities law does not already impose. It would operationalise those obligations, designate who may speak for the issuer, and establish the procedures that prevent inadvertent selective disclosure — which would violate both the spirit and the letter of the [[about-disclosure-obligations|continuous disclosure framework]].

Selective disclosure and fair access

The foundational concern an investor relations policy addresses is selective disclosure: the communication of material non-public information to one or more investors or analysts without simultaneous public disclosure of the same information. Selective disclosure violates the fair access principle of securities law.

In Canada, the primary mechanism for preventing selective disclosure in practice is CSA National Policy 51-201 Disclosure Standards.¹ It guides issuers on the circumstances under which communications with analysts and institutional investors could constitute improper selective disclosure, and it sets out best practices for managing those interactions.

Designated spokespersons

The planned policy is intended to designate, by title, a limited set of individuals authorised to speak for the issuer on matters of substance to investors. The designated spokespersons would typically be the Chief Executive Officer, the Chief Financial Officer, and the director or officer holding primary responsibility for investor relations. Enquiries from analysts, investors, and financial media concerning financial results, business strategy, market position, or forward-looking guidance would be directed to one of them.

Spokesperson restriction as disclosure control

No other employee, director, or officer would respond to investor enquiries on substantive matters. This restriction is not protocol courtesy; it is a disclosure control. The risk of selective disclosure arises precisely when individuals without full awareness of what has been publicly disclosed speak spontaneously with an analyst or investor. Concentrating substantive external communication in a few spokespersons — trained on the policy, and briefed on the current state of public disclosure before any investor interaction — is intended to reduce the risk of an inadvertent material disclosure in an uncontrolled channel.

Quiet periods

The planned policy is intended to establish a quiet period before each scheduled earnings release. A standard quiet period would begin three weeks before the last day of each fiscal quarter. It would end immediately on issuance of the earnings press release for that quarter. During it, designated spokespersons would decline to meet with analysts or investors, and would neither discuss nor confirm analyst earnings estimates, revenue expectations, or other forward-looking information not yet publicly disclosed.

Purpose and scope of the restriction

The purpose is twofold. First, a quiet period is intended to protect the issuer from confirming or denying analysts' estimates — which would be guidance through a selective channel — at the moment when internal reporting is being consolidated and management is most likely to know the quarter's actual outcome. Second, it would create a predictable, publicly understood period in which all market participants understand the issuer does not intend to communicate privately, reducing the risk of rumour-driven trading.

The restriction is intended to reach statements that could constitute guidance, confirmation of estimates, or disclosure of information not yet publicly filed. Within a quiet period the issuer would still answer factual questions about previously disclosed historical information, acknowledge publicly available documents, and maintain normal-course business communications.

Guidance policy

A guidance policy specifies when an issuer provides forward-looking financial guidance to the market, in what form, with what caveats, and when previously provided guidance is updated or withdrawn. Guidance is not required by NI 51-102; it is voluntary.² Once given, however, the continuous disclosure obligations of NI 51-102 attach to it: if a material change makes previously disclosed guidance no longer reasonable, the issuer must update or withdraw it through a public filing or press release.

Business outlook approach for new issuers

For a new reporting issuer without a track record of earnings guidance, one common approach is a business outlook in the annual MD&A — expected revenue ranges, capital expenditure plans, and key operating assumptions for the coming year — rather than quarterly earnings-per-share targets. That approach gives investors the context to build their own models without obliging the issuer to update guidance every quarter as conditions change.

Updating or withdrawing guidance

Where guidance has been given and may later become unreliable before the next scheduled disclosure, the issuer is intended to determine whether the change is material. A material change requires an immediate press release updating or withdrawing the guidance. Under the planned policy, the Chief Financial Officer would make that determination in consultation with legal counsel, and would document the decision and its basis for the audit file.

Earnings releases and investor calls

No earnings release has been issued to date; Press Releases records the same position for material change disclosure. The practices below are the ones Woodfine intends to apply once the channel opens.

Each quarterly earnings release is intended to be issued as a press release distributed over a recognised newswire service, filed on SEDAR+, and posted to the issuer's corporate website simultaneously with distribution. The interim financial statements and MD&A would be filed at the same time. A conference call open to the investment community would follow the release, typically within two to four hours of issuance.

Conference call records and inadvertent disclosure

Each earnings call is intended to be recorded and archived on the issuer's investor relations website, with a replay available long enough for investors who could not attend live. Every substantive statement made on the call that could be material would be treated as a public disclosure. If a new material fact were disclosed inadvertently on a call the general public could not attend, the issuer would have to disclose it publicly at once, by press release or another broadly disseminated channel.

Cross-jurisdictional framework for a Regulated Reporting Entity

One policy is intended to govern investor communications in each Qualified Jurisdiction where reporting entity status applies to Woodfine or to one of its direct-hold vehicles. Disclosure mechanics differ by jurisdiction — SEDAR+ in Canada, EDGAR in the United States, CNMV filings in Spain, and filings with the Comisión Nacional Bancaria y de Valores through its STIV-2 platform in Mexico. The underlying principles — designated spokespersons, quiet periods, and guidance management — are intended to apply uniformly.

Regulation FD alignment in the United States

In the United States, the Regulation FD (Fair Disclosure) rule adopted by the Securities and Exchange Commission in 2000 prohibits selective disclosure of material non-public information to certain market professionals and shareholders, and concurrently requires broad public disclosure of the same information. The principles the planned policy would adopt to meet Canadian disclosure standards are consistent with Regulation FD, and in most respects more conservative than it.

What this is not

This describes a policy Woodfine intends to adopt, not one in force. No quiet period, guidance practice, earnings release, or investor call described here is currently operating, and the terms the board ultimately approves may differ. Nothing here states in which jurisdictions Woodfine or any direct-hold vehicle currently holds reporting entity status; that is disclosed in the applicable filing. It is not a summary of securities law and not legal advice — NI 51-102 and NP 51-201 govern, and their text prevails over any description of it here.

Navigate

Topics

Resources

PointSav network