International Encyclopedia of Communication Online

Extract

Financial communication entails all of the strategies, tactics, and tools used to share financial data and recommendations with investors and other interested parties. Around the world, companies need strong, proactive financial communication competencies to successfully help shape the evolution of capital markets for themselves and their industries. In return, companies likely will see the benefits in stock price and operating performance. Thompson (2002a , 1) defines investor relations (IR) as “a strategic management responsibility that integrates finance, communication, marketing and securities laws compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a company's securities achieving fair valuation.” The field is described here on the basis of its development in the US and with examples of the US economy. Financial communication evolved during the 1960s and 1970s with, as Mahoney (1991) wrote, a promotional flare. Annual reports became costly showpieces. “Dog and pony shows,” the euphemism for multimedia presentations to security analyst and stockholder meetings, became the trademark of full-service public relations (PR) departments. Financial communicators were technicians, leveraging their communication skills to create the necessary tools, such as reports, speeches, ... log in or subscribe to read full text