FORT SMITH - Regulations for publicly traded companies are complex. Thousands of pages of federal securities laws govern the registration and reporting responsibilities for companies that offer public stock.
When it comes to changing the name of one of those companies, however, the process is relatively easy.
While the internal conversations and tasks associated with transitioning Arkansas Best to ArcBest took many months, the formal process of adopting a new name and NASDAQ trading symbol (ARCB) took less than 30 days. Much simpler than David Humphrey, director of investor relations and a 31-year veteran of the company, would have guessed.
“It really went much more smooth than I would have imagined,” Humphrey said. “I figured it would be much more difficult and complex.”
ArcBest announced its new name on May 1. It likely took longer to plan the unveiling ceremony for employees than it took to register formally a new name and change the stock symbol from ABFS to ARCB with the NASDAQ.
First, ArcBest needed to file an amended certificate of incorporation with the state of Delaware Division of Corporations. Like many other corporations looking to take advantage of favorable courts and tax laws, ArcBest is incorporated in Delaware.
It takes less than $200 and two weeks to make the transformation formal. After filing a new, six-page certificate online and paying $194 the process is complete with the Division of Corporations. ArcBest filed its amended information on April 24 with an effective date of May 1.
From the Securities and Exchange Commission standpoint, there is little that needs to be done to complete the transition. On its next SEC filing, the company will need to reflect the change by attaching its new name to the documents. Stock certificates bearing the old name are still valid, so there are no changes necessary there.
“There really are no SEC reporting requirements,” a SEC spokesman said. “It’s more a state law. You’re legally changing the name of your organization with the state. Really none of this is in the SEC’s purview.”
Christine Barna, a spokesman for NASDAQ , said the exchange requires a minimum of 10 calendar days notice for name change. It requires a two-day minimum for changing a stock symbol, in ArcBest’s case from ABFS to ARCB.
“It’s fairly common for a company to request a name/ticker change,” Barna said, though she didn’t have a firm number on how many transitions NASDAQ facilitated last year.
When it comes to employees, customers and the general public, changing the name is a little more complicated process. Maintaining what UALR marketing professor Gary L. Geissler calls “brand equity” requires more of a company than filling out forms.
Re-branding work, handled in ArcBest’s case internally and externally, can be a complicated and time consuming process. Local employees gathered to learn about the name change on the day it happened. Behind the scenes there was work done on new logos and stationery, an updated website and new social media pages.
All of the work was essentially done because Arkansas Best executives felt identifying with Arkansas was no longer viewed as best for the company. Since it was formed 90 years ago as a trucking company in Fort Smith, ArcBest has grown into a more than $2 billion logistics and transportation provider.
Accurately reflecting its status as a global player was at the heart of the change, Chief Executive Officer Judy McReynolds said.
“Some people, including potential investors, still associate our old name with geographic limitations as a company serving only Arkansas and the nearby region,” McReynolds said. “We have big goals.”
McReynolds told employees during an in-house unveiling that the markets served by ArcBest represent about $250 billion annually. Attracting additional customers from that pool of available candidates and growing is the company’s goal.
ArcBest has its sights set on eclipsing $3 billion by 2015, McReynolds said.
Re-branding is a critical step in accomplishing those goals. A shift in corporate strategy often accompanies new names or similar changes for a company.
Geissler pointed to the former Allegheny Airlines as an example. The airline changed its name to USAir during a time it wanted to build on its reputation as more than a regional carrier. Once the company began to focus on international markets it changed its name to USAirways.
“Name changes can yield g rowth opportunities,” Geissler said. “If the new name change and logo are properly chosen and handled, new names can gain familiarity and acceptance. Also, the unveiling of a new brand identity is an emotional opportunity to energize employees around a new sense of purpose.”
Often name changes generate some negative feedback, initially. Geissler said a company must be committed to financially supporting and communicating the change or “it can be confusing to customers and potentially damaging.”
Despite the costs, complexities and risks associated with a corporate name change, McReynolds said the process was important for ArcBest and its more than 11,000 employees.
“We have to tell our story and our value proposition much more clearly and loudly,” McReynolds told employees, later adding: “Change is why we’re still here after almost a century in business.”
Business, Pages 75 on 05/04/2014