The Perfect Corporate Board: A Handbook for Mastering the Unique Challenges of Small-Cap Companies

CHAPTER 10THE REALITIES OF SMALL-CAP EQUITY RESEARCH

Ins and Outs of Equity Research

Key considerations for directors:

• Small-cap directors need to understand the “business” of equity research if they are to help management garner and maintain research coverage.

• Notwithstanding how critical equity research is to many small-cap companies, many aren’t credible candidates.

• Quality is more important than quantity, since not all research is created equal.

• Management needs to target analysts wisely, but also understand that anyone can write research on the company – good or bad.

Common mistakes to avoid:

• Management is often too impatient with the process of garnering coverage.

• Analysts aren’t “friends” of the company; sell-side research ...