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Article
Publication date: 1 March 2004

Richard R. Dolphin

This paper reports an empirical study conducted in British organisations focussing on the role of investor relations as part of a co‐ordinated marketing communications…

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6843

Abstract

This paper reports an empirical study conducted in British organisations focussing on the role of investor relations as part of a co‐ordinated marketing communications strategy. Consequently this study considers the greatly neglected research area of the management of relationships between national and international organisations and both investors and those others who might consider themselves significant financial stakeholders. It examines the organisational role of investor relations within a co‐ordinated communication programme and suggests that communication with financial stakeholders has a significant role to play as part of a developed corporate communication strategy.

Details

Corporate Communications: An International Journal, vol. 9 no. 1
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 15 May 2007

Youngshin Hong and Eyun‐Jung Ki

The purpose of this paper is to investigate how public relations practitioners perceive investor relations itself and what the potential is in terms of public relations

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3558

Abstract

Purpose

The purpose of this paper is to investigate how public relations practitioners perceive investor relations itself and what the potential is in terms of public relations with empirical results.

Design/methodology/approach

A web‐based survey was conducted by using systematic random sampling with a probability sample of 5,000 public relations practitioners drawn from the 2004 Public Relations Society of America (PRSA) Directory. The survey consisted of three sections, investor relations functions at organizations with a multiple‐answer format, perceptions on specific activities of investor relations with a seven‐point Likert scale, and demographic information.

Findings

Practitioners conceived that counseling with top management the most important investor relations activity and that earning a reputation for honesty the most significant result the activity can create. Moreover, practitioners considered direct involvement with top management a highly effective investor relations strategy for achieving goals. However, for handling investor relations, practitioners showed contrary attitudes regarding qualifications and undergraduate courses, indicating that public relations qualifications would be more needed for entry‐levels, while basics for finance would be more necessary for undergraduates.

Research limitations/implications

This research acquired an extraordinarily low response rate, 3.54 percent and targeted the US public relations practitioners only.

Originality/value

This study is the first to directly investigate public relations practitioners' perceptions on investor relations as well as fairly in accordance with the current consensus that investor relations and public relations should be convergent.

Details

Corporate Communications: An International Journal, vol. 12 no. 2
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 29 April 2014

Matthew W. Ragas, Alexander V. Laskin and Matthew Brusch

Publicly-held companies collectively allocate tens of millions of dollars each year to investor relations, yet little research has been conducted into how investor

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1961

Abstract

Purpose

Publicly-held companies collectively allocate tens of millions of dollars each year to investor relations, yet little research has been conducted into how investor relations officers (IROs) try to determine the effectiveness of this investment. The purpose of this paper is to discuss the above issues.

Design/methodology/approach

This exploratory study is based on a survey (n=384) of IROs who are members of the National Investor Relations Institute (NIRI), the world's largest professional investor relations association.

Findings

Respondents strongly rebuked using share price as a valid measure of investor relations performance. A factor analysis revealed that IROs use four factors to measure program success (listed in order of stated importance): first, international C-suite assessment; second, relationship assessment; third, outreach assessment; and fourth, external assessment. IROs at large-cap companies place significantly more importance on both C-suite assessment and relationship assessment than their peers at small-caps.

Research limitations/implications

These results may not be generalizable to IROs who are non-NIRI members or investor relations consultants. Cross-cultural studies on this topic are needed.

Practical implications

The evaluative factors that emerged in this study may be used by IROs to develop and refine their evaluation metrics relative to their peers.

Originality/value

This is one of the first and largest studies to specifically examine program measurement and evaluation in the context of investor relations. These findings help set the stage for future work in this area.

Details

Journal of Communication Management, vol. 18 no. 2
Type: Research Article
ISSN: 1363-254X

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Article
Publication date: 1 April 2014

Matthew W. Ragas and Alexander V. Laskin

While investor relations have become an established corporate function, research into how investor relations officers (IROs) practice measurement and evaluation is…

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1511

Abstract

Purpose

While investor relations have become an established corporate function, research into how investor relations officers (IROs) practice measurement and evaluation is limited. The purpose of this paper is to examine which approaches and metrics IROs use to gauge their success.

Design/methodology/approach

To address this gap in the literature, this study surveyed (n=384) the corporate membership of the National Investor Relations Institute (NIRI), the world's largest investor relations association, on the topic of measurement and evaluation.

Findings

The results indicate that IROs strongly (80 percent) believe that mixed-methods (i.e. both quantitative and qualitative methods) should be used to measure the success of investor relations. Mixed-methods advocates place significantly more importance on measurement than IROs that prefer quantitative- or qualitative-only approaches.

Research limitations/implications

The results of this survey indicate that IROs typically place the most value on metrics that are qualitative, non-financial and relationship-oriented. These findings suggest that IROs believe they should be evaluated in large part on their competency at relationship management.

Practical implications

From a benchmarking perspective, these findings suggest that IROs looking to align with their peers should use a mix of both quantitative and qualitative evaluation measures that are non-financial and relationship management-focused.

Originality/value

These findings contribute to recent efforts to explicate a general theory of investor relations. While investor relations scholarship has grown in recent years, up until this point, little attention had been paid to measurement and evaluation.

Details

Corporate Communications: An International Journal, vol. 19 no. 2
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 25 May 2018

Alexander V. Laskin

The purpose of this paper is to apply a third-person effects theory to the study of corporate social responsibility communications. Previous studies have asked what…

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1004

Abstract

Purpose

The purpose of this paper is to apply a third-person effects theory to the study of corporate social responsibility communications. Previous studies have asked what importance investors assign to the socially responsible activities of corporations. However, in the context of publicly-traded companies, it becomes important not only to calculate the effects of available information on an individual investor, but also to estimate the effects of every piece of information on the investor’s perception of the investment community at large.

Design/methodology/approach

The study uses a survey methodology in order to evaluate what value respondents assign to socially responsible behaviors as well as to identify a presence of third-person effects in the corporate social responsibility evaluations. Using an online survey, the respondents were asked to read a modified news article and the respond to a series of questions. In total, 96 completed surveys were collected and analyzed.

Findings

The research finds the presence of third-person effects incorporate socially responsibility message processing. The results of the study show that, while individually people are supportive of the socially responsible behaviors of corporations, they perceive others to be less supportive of such behaviors; they also see others as less likely to encourage such behaviors through action. As a result, people are less likely to act on their own views of corporate socially responsibility as they perceive themselves to be outliers. These findings lead to important consequences for investor communications, which are discussed in light of the efficient market hypothesis.

Research limitations/implications

From an academic standpoint, the study proposed that in investor and financial communication, third-person effects could play a significant role. Yet, third-person effects research in investor relations literature simply does not exists. Thus, the study’s main contribution is expanding third-person effects theory into the field of the investor relations research.

Practical implications

From practical standpoint, expectations and perception of corporate social responsibility have a significant effect on corporate reputation and, thus, communication about corporate social responsibility become important as they shape these perceptions and expectations. Yet, such corporate social responsibility issues may include a variety of matters, such as governance, responsibility, and the quality of social and economic choices, sometimes even contradictory to each other. It becomes a job of investor relations managers to study, analyze, and respond to these competing demands.

Social implications

From societal standpoint, the study advances the debate on the role of corporations in the society. With such concepts as social license to operate and creating shared value, and the growing expectations about corporate behavior, understanding the stakeholders perceptions of socially responsible behavior of corporations as a function of their perceptions of other stakeholders’ viewpoints, creates a better understanding of the complexities involved in the issue of corporate social responsibility reporting.

Originality/value

Since investors and other financial publics are not homogenous and may have different perspectives, opinions, values, etc., they may react to the same information differently. Furthermore, they may expect others to behave differently and such perceptions, whether accurate or not, may, in fact, influence their own behavior, as third-person effects theory would suggest. Investor relations, then, becomes a function of managing these expectations. The presence of the third-person effects in investor communications can have a strong effect on market behavior and, thus, must become an important part of the investor relations professionals’ job – how the messages are crafted, communications, and measured. Yet, third-person effects is non-existent in the investor relations literature. Thus, the study provides an original contribution by applying a third-person effects theory in the investor relations research.

Details

Corporate Communications: An International Journal, vol. 23 no. 3
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 1 June 2001

Claire Marston and Michelle Straker

Investor relations is the communication of information relating to the company to the financial community; analysts, investors and potential investors. It is regarded as a…

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3470

Abstract

Investor relations is the communication of information relating to the company to the financial community; analysts, investors and potential investors. It is regarded as a relatively new phenomenon, which has developed most rapidly in the USA followed by the UK. Traditionally continental European companies have been viewed as more reliant on loan rather than equity funding. However the development of increasingly important equity markets throughout Europe has led to a growth in importance of the Investor Relations function. This paper examines the importance of the investor relations function within the top 80 continental European companies by reporting on the result of a postal questionnaire. The results confirm that many continental European companies have well established investor relations practices and the function is growing in importance.

Details

Corporate Communications: An International Journal, vol. 6 no. 2
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 1 January 1997

Pekka Tuominen

The objective in investor relationships is to create common long‐term interaction between the companies and their direct and indirect partner groups in the investor

Abstract

The objective in investor relationships is to create common long‐term interaction between the companies and their direct and indirect partner groups in the investor community. Information provided for the investors is a key instrument in investor relationship marketing. The short‐term investor episodes initially form the basis of long‐term investor relations. Various relational bonds of attraction, trust and commitment may evolve in the investor community. Attraction is mainly a future‐oriented bond. It incorporates the expectations of each party concerning the potential rewards of the exchange relationship over time. Trust has its roots clearly in the common history of the relationship, but is essentially also coloured by current expectations about the future. Commitment is the most advanced bond and takes the most time to develop. It primarily reflects the prior history of the relationship. Empirical evidence from the Finnish stock market suggests that success in investor relations requires the companies to extend the scope of investor relations from a mere publication of obligatory annual and interim reports to more frequent, extensive, proactive and diversified two‐way interaction and communication.

Details

Corporate Communications: An International Journal, vol. 2 no. 1
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 11 September 2017

Abe de Jong, Marieke van der Poel and Michiel Wolfswinkel

This paper aims to present case study evidence on the changes in the relations between chief executive officers (CEOs) of large firms and shareholders in the past three…

Abstract

Purpose

This paper aims to present case study evidence on the changes in the relations between chief executive officers (CEOs) of large firms and shareholders in the past three decades of the twentieth century. In line with insights from agency theory, the CEOs have experienced increased scrutiny from their principals, the shareholders. This development has affected financial communication and investor relations as well as stock market prices.

Design/methodology/approach

The Dutch electronics firm Royal Philips NV in the transition period of 1971-2001 has been studied using publicly available disclosures and stock market prices. A descriptive case study approach is combined with event study methodology.

Findings

It was observed that the increased emphasis on shareholder interests has affected the interactions between Philips’ respective CEOs and the shareholders’ reactions to strategic decisions as measured by stock price changes. Around the beginning of the twenty-first century, clarity and openness in CEO communication was the norm and deviations were punished with volatile stock prices.

Research limitations/implications

The study relies on publicly available data.

Originality/value

The case study of Philips can be extrapolated to other exchange-listed firms in the late twentieth century, which faced changed expectations about the role of the CEO, investor relations and the CEO’s accountability toward shareholders. This transition is relevant not only as a historical observation, but also as a background to studies in finance and management about top management and financial markets.

Details

Journal of Management History, vol. 23 no. 4
Type: Research Article
ISSN: 1751-1348

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Article
Publication date: 27 April 2012

Christian Hoffmann and Christian Fieseler

In this paper, the authors aim to identify a range of non‐financial factors that play a role in the formation of a company's image, and ultimately its valuation, on…

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4889

Abstract

Purpose

In this paper, the authors aim to identify a range of non‐financial factors that play a role in the formation of a company's image, and ultimately its valuation, on capital markets. By identifying and highlighting their relative importance to the perceptions of equity analysts, the authors seek to show that investor relations are best understood as a strategic communication function rather than a mere purveyor of pure financials.

Design/methodology/approach

The findings are based on a two‐tiered approach, relying on qualitative interview data collected among 42 equity analysts and a subsequent exploratory factor analysis performed on data obtained from a survey among 134 buy‐ and sell‐side analysts.

Findings

The authors argue that equity analysts consider the following eight categories of non‐financial information when forming an impression of a company: the stakeholder relations of an organization, its corporate governance, its corporate social responsibility, its reputation and brand, the quality of its management, and its strategic consistency. One of the most important factors, however, is the quality of a company's communication, which underscores the strategic role that the investor relations function should play in fostering positive capital market relations.

Research limitations/implications

Being explorative in nature, the categories and scales proposed need further validation. Furthermore, in future research, it would be worthwhile to explore not only the role of non‐financials in image formation but also the interplay between financials and non‐financials in image formation.

Practical implications

Investor relations professionals should consider the factors presented in this study in their work in order to ensure that they cater to the actual information needs of capital market participants. The consideration of non‐financial factors enhances the quality of financial communications. It also enriches the understanding of the strategic communication tasks of the investor relations department.

Originality/value

This paper describes an empirical analysis of the management of corporate relationships with financial audiences, a stakeholder group increasingly focused on by communications research. It represents a contribution to the further establishment of investor relations as a strategic communication function.

Details

Corporate Communications: An International Journal, vol. 17 no. 2
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 12 March 2019

Bahtiar Mohamad, Bang Nguyen, TC Melewar and Rossella Gambetti

This paper aims to investigate the conceptualisation of corporate communication management (CCM) and its dimensionality from the practitioners’ perspectives. It proposes…

Abstract

Purpose

This paper aims to investigate the conceptualisation of corporate communication management (CCM) and its dimensionality from the practitioners’ perspectives. It proposes to validate an operational definition and dimensions of the CCM construct, which have not been identified in the literature.

Design/methodology/approach

The initial concepts are based on academic literature and followed by 12 face-to-face interviews with corporate communication practitioners and consultants from Malaysia to confirm the practicality of each dimension. QSR Nvivo Version 9.0 software is used to analyse the qualitative data. Then, the data are classified through deductive content analysis based on key words or themes.

Findings

The diverse perspectives are shown from the practitioners and consultants on the dimensionality of CCM. Most of the interviewees suggest that CCM dimensions include corporate advertising, corporate affairs, investor relations and employee communication within the corporate communication and other departments. They also found the public relations and media relations are clearly under corporate communications manager’s supervision. This research confirms the concept of CCM and its dimensionality to operationalise the CCM construct. The CCM dimensions also offer opportunities for further research to develop the measurement scales.

Originality/value

This research contributes to the clarification on the subject matter by developing clear concepts of the CCM and by offering insights about the role of the CCM dimensions, which help managers to more successfully incorporate the CCM dimension into the corporate management strategy. This paper also examines the concept of CCM and confirms its dimensionality, which helps in developing the CCM measurement for further quantitative research.

Details

The Bottom Line, vol. 32 no. 1
Type: Research Article
ISSN: 0888-045X

Keywords

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