Fund manager trust and information complexity

Abstract

Purpose

This study aims to explore fund manager use of trust to reduce information complexity concerning corporate intangible resources and sustainability and what consequences this have for corporates as providers of information. Analytically, fund managers are considered part of a system with social meaning.

Design/methodology/approach

A qualitative research approach is used. Data are obtained from two focus group discussions that occurred on two separate occasions. The first discussion was between four communications executives at leading Swedish companies. The second discussion was between four experienced fund managers in the Swedish financial market.

Findings

The results suggest that fund managers oscillate between exhibiting trust and distrust when reducing the complexity of information on intangible resources and sustainability. Fund managers tend to trust the stable context of company information and strive to trust top management. Communicative dilemmas emerge when fund managers oscillate between trust and distrust. The fund manager disinterest in details emerges because of a reliance on a stable information context and company management. The representation dilemma emerges when narratives are used in corporate reporting.

Research limitations/implications

This study contributes empirically to the knowledge concerning the social complexity of fund management.

Practical implications

The paper increases the understanding of communicative difficulties for corporates to communicate with actors on the financial markets through narratives on intangible resources and sustainability.

Originality/value

By focusing on the social meaning in the communication between companies and financial markets, we have contrasted the dominant view of financial economics of financial market actors as rational agents and the individualistic mode of theorizing in accordance with rational choice theory.

Citation

Henningsson, J., Johanson, U. and Almqvist, R. (2015), "Fund manager trust and information complexity", Qualitative Research in Financial Markets, Vol. 7 No. 4, pp. 346-362. https://doi.org/10.1108/QRFM-08-2014-0023