Maintaining Accurate Web Site Disclosure Records

The accessibility and popularity of the Internet has seen the corporate/investor web site move to the front line of disclosure. It’s likely no surprise that Q4 Web Systems (Q4) has seen a growing trend over the past two years in issuers looking to extend controls beyond core documents to encompass other forms of communication. And the corporate web site is often their first priority in this expansion.

One very compelling reason for this is the fact that material information extends beyond regulatory filings and core documents to potentially any communication. Information is material if its ‘omission or misstatement could influence a reasonable investor’s decision to buy, hold or sell securities in the company’. (In addition, information not considered to be material may become so when viewed in the context of other disclosures or as elements in a larger picture.)

Considering the threshold for materiality, it’s surprising that most companies still can not conclusively verify the content of their web site at a given time in order to address a regulatory or investor inquiry. Nor can they demonstrate that the proper approval process was followed in disclosing non-core information on the web site or that errors/omissions in web site disclosure were addressed in a timely manner.

By ensuring the same stringent approach toward web site disclosure as to accuracy in core documents, issuers are better protected. So is the broader investment public who benefit from more complete and accurate information.

This broadening of the disclosure universe for many companies means a consistent, formalized and documented approval process (certified under SOX 302 and MI 52-109) and supported by comprehensive records of all site content and associated approvals.

To reduce risk associated to web site disclosure issuers should:

• Develop comprehensive and practical disclosure controls and procedures to govern both core and non-core communications - including the corporate web site
• Ensure that accurate, easily searchable records are captured to verify all web site content and associated approvals
• Make certain that records are stored in a highly secure environment to prevent tampering
• Ensure that records can be accessed quickly by a number of authorized people within your company

What should your record consist of?

A comprehensive web site record should comprise all site content including text, images, presentations (PowerPoint, Flash, video and audio) PDF documents and information provided to the site via data-feeds.

Understanding not only what was on your site, but the context in which the user viewed your information (e.g. links to and from content, information positioned alongside other content) provides you with the best understanding of how impressions were formed.

Another critical aspect of a web site record is the ease with which the record can be stored, accessed and searched by a number of people within the organization. Filing systems that are too dependent on specific individuals present a risk as do records that require complex reconstruction of the actual process in order to provide a report.

Storage is also a critical component of archiving web records. To ensure the protection and reliability of your records, you’ll want to have it stored in a secure environment (so it can’t be tampered with) and backed up at least daily. Finally, depending on your company’s records management policies, you may have to ensure that the place where you’re hosting your information is SAS 70 or in Canada CICA 5970 certified.

Ways of Maintaining Accurate Web Site Records

There are several ways that one can achieve a web site record with some methods being more accurate and/or time consuming than others. The various methods include:

• Manual record keeping of all components
• Page level versioning (a feature of some content management systems)
• Site scraping (software that ‘scrapes’ your site at predetermined intervals in order to capture a record)
• Integrated, real-time records capture system

Manual Approach

Many companies try to maintain records of what their site looked like by capturing screen grabs through Windows (key Control+Alt+Print Screen) and then pasting these images into Word or Photoshop files. They then file these along with Word, PowerPoint and PDF versions of their actual web site content. There are several challenges presented by this method:

• Incomplete records - It is difficult to assure that records are complete and accurate. Information can appear and disappear on a site within minutes – ensuring comprehensive records requires a daily and ongoing commitment. (And the only guaranteed method of accuracy is real-time records capture.
• Error prone - The potential for human error and omission is significant and increases substantially when other departments and external/internal resources are required to make changes to the site and then inform the ‘record owner’.
• Lacks context - Having static screen grabs does not provide the context in which a site visitor formed his impression by linking from one page to another etc.
• Reporting difficulties - Housing information in a variety of files makes it difficult to reconstruct an accurate representation of what was on the site at any given time. In addition, information from data feeds would not be included in this record, although stock quotes, press releases and regulatory filings are available elsewhere. It’s just another step in your reconstruction process.

Overall a manual approach is very time-consuming (capturing, filing, retrieving and reporting on records) and ultimately not very accurate. The end result is not worth the effort. And importantly, the approach outlined above does nothing to strengthen your disclosure controls. (See page level versioning for further comment on reporting and storing records.)

Site Scraping

An alternate to screen grabs is to implement site scraping software to visit your site on a pre-determined time schedule to copy all of your content. The challenge with a pre-determined time schedule (i.e. every month) is the high likelihood that changes will not be accurately time-stamped - a critical consideration when looking to support a due diligence defense. As well, this approach does not tie the copy of the site to the Audit Trail, meaning reconstruction of the record would be required after the fact, resulting in increased time and costs.

Content Management Systems (Page Level Versioning)

Some content management systems (CMS) offer page level versioning as a way to keep track of previous versions of page content. This type of versioning is intended to give the internal users of the system the ability to roll-back to a previous version of a page. Some companies try to use this type of versioning to maintain accurate web disclosure records. Although a good start, there are a number of issues related to this approach. They include:

• Incomplete page views - Each web page consists of more than the centre panel of text content (which is what page versioning tracks). Using page versioning does not capture all of the content that is presented on a page, such as the complete layout of content and items typically displayed in the right rail including supporting documents, images, presentations, etc. It also does not capture how the content was actually presented on your site or the context in which it was presented. To supplement this some companies also use screen grabs to capture the look of each page while others use site scraping software (see details earlier in article).
• Inaccuracy of documents and file records - Further issues exist regarding documents and files (presentations, reports, video, flash etc). Although most CMS systems provide some method to manage these files, the accuracy of the records maintained (i.e. over writing of original files) is very weak. As well, page level versioning does not capture where on the site these files were presented or the context in which the user may have accessed them. A typical method for managing this problem is to implement a manual process of naming convention and file storage. Again the challenge here is the inherent risk of a manual process (errors and omission) and the time and cost it takes to manage.
• Excludes data feeds - Data feeds (press releases, stock quotes, regulatory filings) exist outside of the CMS system and therefore, outside of page level versioning. This means that information provided to your site via data feeds is not captured in the record.
• Reporting difficulties - Reporting on all of this information presents the biggest challenge of all. To be able to do so would require the development of a custom application to consolidate the page versions, audit trail, screen grabs and offline files. Achieving a consolidated record set would present many significant challenges due to the very different types of data being brought together. Once this was achieved however, you would then have a record that could be reported on. The costs and time associated to this effort would be significant.

In summary, page level versioning gives you some aspects of a web site record but a significant work-around is required in order to arrive at a comprehensive record. Some CMS systems do have automated workflow and mandatory approval requirements and so will help to support your disclosure control framework.

Integrated Web Record Systems

As you can see from the problems illustrated above, what’s really needed is an integrated web content and records management system – a solution that allows you to make changes to site content and then captures these changes and associated approvals in a real-time, easily searchable record. A system that supports your disclosure control framework by mapping to your specific approval process.

Three years ago the people of Q4 Web Systems looked for a software application of this nature in order to address a requirement from a very forward-thinking issuer. We couldn’t find one. And to this day, we have yet to find such a solution, outside of the one that we ultimately created – Q4 WEB. (We would be very interested in learning of others should you have information to the contrary. Please contact the writer.)

The discussion of web site records is becoming much more prevalent. As more issuers look for solutions, it’s important that they truly understand the impact of the decisions they make in terms of:

• time (and ultimately the true cost of maintaining records)
• accuracy and completeness
• ease of retrieval and reporting
• security

Q4 WEB consolidates all aspects of an effective and detailed web site record in an easy to use and reportable format. Everything that happens on your site is captured in a comprehensive record which is stored and instantly retrievable. This record is comprised of all content that appeared on the site, uniquely including information updated through automated data-feeds such as press releases, stock quotes, and regulatory filings. Also unique to this system, the full content of any presentations, media files and transcripts that appeared on the site is included in the record along with details on exactly when this information was posted.

Q4 WEB is the only solution that allows you to instantly recall fully functioning copies of your web site from any point in time. In addition to this aspect of the record, a detailed workflow/audit trail is also captured that specifies each change, who made the change, who approved it and when the change was made. In addition, the records can also be queried to provide specific information such as isolating the first time a specific keyword was displayed on the site.

Q4 WEB provides a complete web content management system that includes integrated workflow and automated approvals to support your disclosure controls and procedures. It includes an embedded records management system to capture all aspects of your corporate web site in a consolidated and easy to report on data record. With the Q4 WEB record, companies have confidence that this aspect of their compliance and risk management has been taken care of.

This article appeared in The Inside View – an online newsletter dedicated to the topic of capital markets disclosure and brought to you by Q4 Web Systems. This newsletter provides an ‘inside’ perspective on how your peers address disclosure requirements. It will also include opinions and guest columns from experts in disclosure legislation and best practices. Click here to subscribe