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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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

Purpose – The purpose of this chapter is to explore the proactive role played by investor relations officers (IROs) in enhancing the quality and delivery of corporate social performance (CSP) information to social responsibility investment (SRI) analysts and investors, thereby improving the link between CSP and corporate financial performance (CFP). The increasing pressures on corporations to produce and communicate CSP information will be described, as well as how the timely and meaningful communication of CSP can improve CFP.

Methodology/approach – Subsequent to a review of relevant literature, three case examples from McDonald’s, Nestlé, and Stora Enso illustrate Hockerts and Moir’s grounded theory framework that suggest how IROs can improve communication of CSP.

Findings – This chapter illustrates three levels of communicating CSP information. First, IROs target SRI investors and respond to ESG inquiries and surveys. At the second level, IROs integrate ESG information into business strategy and financial results. At the third level, IROs actively market CSP and create a two-way proactive dialogue between SRI investors and senior management and the board.

Practical implications – This chapter provides practical examples to improve ESG activities and their communication via the IRO to SRI analysts and investors.

Originality/value of chapter – This chapter contributes to the literature on the CSP–CFP link by illustrating how proactive IROs are improving the CSP information channel to SRI securities analysts and investors. Furthermore, it advances the theory and research concerning the impact of the information channel between IROs and securities analysts behind the CSP–CFP link.

The purpose of this paper is to develop a synthesis for investor relations (IR) research on how to understand, conceptualize and build trust relationships between companies and the financial community within the practice of IR. In doing so, a working definition of the role of trust for IR, a conceptual model as well as strategies on how to establish, maintain and foster trust relationships within IR are proposed. Furthermore, a brief research alley is sketched to inspire more corporate communication scholars to conduct empirical studies in this field of research.

The paper is based on a thorough literature review on empirical and theoretical work in the field of IR, strategic financial communication as well as related disciplines such as public relations, marketing and business research. Furthermore, the literature from other disciplines dealing with trust in the organizational context (economics, psychology, sociology) has been reviewed to develop a working definition for the role of trust in IR.

The following supposition for the role of trust in IR has been worked out: “Trust relationships within investor relations manifest themselves on a micro-, meso-, and macro-level and involve interactions with various individual actors, groups of people, organizations, institutions, and systems. Within these trust interactions, investor relations presents itself simultaneously three-fold: as a discipline, an organization and as individual practitioners.”

To support the establishment, maintenance and fostering of trust relationships, IR needs to provide honest, transparent, comprehensive and coherent information to be in continuous, direct and mutual contact with stakeholders (e.g. investors, analysts, CEOs) and to endeavor a fair representation of the company in the media and among the public.

Facing recent changes in the media, regulatory and corporate environment, this conceptual paper provides a thorough discussion of the role of trust in the field of IR. The working definition, the conceptual model as well as the practical strategies to build trust relationships provided in this paper might help IR to overcome these challenges. The call for more research in this area and the actual employment of the suggested trust building strategies might contribute to fostering trust relationships in the financial markets, thereby contributing to a more sustainable financial system in the long run.

Investor relations literature reports that after an era that “the higher the stock price, the better”, currently investor relations entered into a new era where “overvaluation is perhaps as bad as undervaluation” (Laskin, 2018a, p. 19). This paper searches for evidence on whether news coverage around abnormal returns indicates that corporate communication effectively seek fair value prices.

Using data of the Portuguese market, it investigates if the news coverage and the investor relations' influence on such coverage (namely as a source of the news) are symmetrical before and after extreme abnormal positive or negative returns. This paper uses event study methodology, performs content analysis and applies statistical and econometric analyses.

The findings are consistent with the idea that companies communicate differently in face of positive and negative abnormal returns. Particularly, before the event, companies are more frequently cited as a source of the news for positive events. This indicates that companies seek to capitalize the positive impact of the favourable subsequent disclosures. After the occurrence of abnormal returns, companies are more often a source of the news for negative cases, seeking to mitigate their impact. Additionally, after negative events companies are more frequently mentioned in the news with a positive content than they are mentioned before.

The new approach of this study allows the companies' information stakeholders (namely investors and regulators) to become more informed and critical in the analysis of news coverage and its sources.

As far as the authors of the paper know, this is the first study that addresses the question of eventual asymmetric behaviour of companies’ communication in face of positive and negative abnormal returns.

The study explores the use of professional investor relations (IR) practices in South African (SA) listed companies to understand which theories may be responsible for IR's adoption and growth in South Africa, an emerging economy. Therefore, this study evaluates shareholder value maximisation, stakeholder and legitimization theory and institutional isomorphism theory as possible theories to explain professional IR behaviour in SA listed companies.

The study design is qualitative and exploratory, based on a questionnaire developed and sent to all companies listed on the Johannesburg Securities Exchange (JSE).

The results indicate evidence of isomorphic spread to SA environments from practices observed in the UK and the USA, which we find are mostly performed to promote shareholder interests. The data suggest some evidence that the communication needs of black economic empowerment and environmental, social and governance (ESG) investors are given priority, suggesting the utility of professional IR to obtain legitimisation from society. Contrary to expectation is that social media communication channels are not extensively used.

The descriptive nature of this study may be valuable to IR practitioners to improve SA IR practises, while neglected legitimisation opportunities with regard to the needs of ESG and black economic empowerment shareholders may be fruitfully addressed by practitioners.

This study innovates in its use of legitimisation theory and isomorphism theory to develop the study's expectations. Social problems provide contextual elements unique to SA which provides a good opportunity to test the expectation of legitimisation theory's influence on professional IR practices.

The purpose of this paper is to show the role of educational diversity in improving investor relations (IR) quality and examine how this impacts the number of shareholder activism incidents a firm encounters.

The paper reviews literature on marketing, finance, and corporate communications to develop a conceptual framework which is tested using a combination of secondary data and primary data collected through a survey amongst IR professionals working at companies in the Euronext 100 stock index.

The empirical results support the conceptual framework, showing higher IR quality levels and lower shareholder activism intensity for companies with educationally diverse IR teams. In particular, the presence of marketing and communication experts in IR teams contributes to higher IR quality and lower shareholder activism.

Future research may investigate the robustness of the results with larger and internationally diversified samples and examine how, besides educational diversity, other organizational arrangements through which finance professionals work together with marketing and communication professionals impact IR quality.

The results suggest that to improve their IR quality and minimize shareholder activism, companies should check and when necessary increase the educational diversity of their IR teams.

This is the first paper investigating the role of educational diversity on IR quality and the impact on shareholder activism, developing and testing an innovative conceptual framework that integrates marketing, finance, and corporate communication theory.

While several extant studies have discussed the strategic importance of investor relations (IR) for listed corporations, few have tried to apply findings from strategic communication research to IR. Therefore, little is known about the planning and evaluation of IR programs, with even less data available on IR's involvement in top management decision-making. The purpose of this paper is to examine research on planning and evaluation practices in German Prime Standard corporations' IR departments.

The method entailed a survey of 51 heads of IR departments from the largest corporations listed on the Frankfurt Stock Exchange concerning the topic of measurement and evaluation.

The findings highlight an intermediate stage in the professionalization of the still-emergent IR function. While IR has been established as an independent function with some consideration in strategic leadership, strategic management of the function is still evolving. This study shows that while some form of planning is the norm, IR departments at smaller companies tend to focus more on departmental objectives than on deriving objectives from the corporate strategy. Also, systematic evaluation remains lacking in many smaller companies' IR departments. As a result, IR managers from smaller companies are consulted less frequently during top management meetings on corporate strategy.

This study is based on data collected only from German Prime Standard corporations. While satisfactory in the context of quantitative IR studies, the response rate from the reported survey was only 32%. Furthermore, the average level of strategic IR management among German listed companies actually may be somewhat lower than reported in this paper, as large listed companies are somewhat overrepresented in the sample.

This study addresses an apparent research gap, i.e. to date, little is known about the strategic management of the IR function, especially in a non-US context. This analysis shows that theories and frameworks from strategic communication management can be applied to the IR function.

The purpose of this paper is to explore the role of knowledge transfer in the communication of environment, social, governance (ESG) factors between companies and institutional investors, when they attempt to reach a full appreciation and mutual understanding.

Empirical data were gathered through in-depth semi-structured interviews with six European institutional investors. Archival material was used to triangulate the findings.

Based on the interviews it was evident that ESG is only one consideration in the investment process and that there are several approaches toward integrating ESG. Furthermore, the investors viewed ESG within a financial framework suggesting that this financial framework is part of their vocational cultural professional mental models. Finally, the results indicate that investors attempt to reach a mutual understanding of ESG by carrying out an active dialogue with target companies.

The study indicates that companies should discuss/approach? ESG issues from a financial perspective. The findings also suggest that companies should emphasize the role of dialogue when communicating with investors in order to develop a mutual understanding of the company's ESG performance. Finally, by proactively discussing ESG with investors, companies will not only play a role in developing the knowledge base of capital markets regarding ESG, but this will also offer an opportunity for companies to explicate their own communication agenda.

The paper develops a framework for communicating ESG between companies and institutional investors. The framework depicts the diverging mental models of the two parties.

Much in accounting research depends upon equity valuation. Too often, what the stock of publicly traded companies trade at is taken at its face value. Knowing that valuation is a function of performance relative to consensus security analyst expectations, more needs to be known about how these expectations are created and changed. The paper aims to assert that the guidance provided by top-level company management is important to the work product of analysts. The paper develops information from managers involved in these interactions.

Semi-structured interviews were conducted with 31 high-level executives employed by large USA companies in several industries. What those companies provided was interpreted through the theoretical lens of institutional theory and amounts to a qualitative content analysis approach to the subject.

The authors find that institutional theory well describes the important features of analyst guidance. Participants are aware of the broad societal interest that exists in the outcome of the guidance process. The participants accept the need for independent analyst opinions about their companies and their future prospects. In many ways, executives provide analysts more than just raw information and employ strategic structuring for analysts to produce expectations that will allow their companies a favorable pathway to future success as such is judged by the markets. The result is understood as being in the best interests of all market participants, even if it disproportionately benefits current corporate leadership.

Results are dependent upon the interview process, needing the correct questions to be asked and the willingness of interviewees to speak their lived truth. The paper calls into question traditional capital markets studies that evaluate quantitative relationships between projected accounting balances and subsequent stock market prices as a literal truth or as the result of scientific calculation.

Market participants should be somewhat more skeptical about companies that are routinely able to meet analyst expectations. To a large extent, such displays do not just happen but instead are manufactured to take place by virtual of a careful dance that is mindful of excesses on several sides.

The antagonistic interests of two important groups in the stock market is actually an unrecognized symbiotic dependency that prioritizes continued permission.

The accounting literature is very dependent on the work product of analysts. This is a rare opportunity to peak behind the curtain of their expertise in a critical fashion. The paper breaks ranks with the literature by trying to understand the thinking behind the narratives of capital market participants.