Alexander V. Laskin

A Descriptive Account of the Investor Relations Profession: A National Study

Despite being a practice of vital importance for corporations, investor relations commands little attention in scholarly research. The studies of investor relations from a strategic communication standpoint are almost nonexistent in the United States. At the same time, investor relations today is undergoing a major shift from financial reporting to building and maintaining relationships with shareholders. The article reviews literature to define the current body of knowledge and state of research in investor relations. Then, the article reports on a survey of Fortune 500 companies to identify major investor relations practices at corporations: investor relations activities, their target audiences, their place in organizational structure, the education of investor relations officers, and what problems investor relations officers face.

Investor Relations: Two-Way Symmetrical Practice

Although public relations claims investor relations as one of its specializations, scholars have paid little attention to it and practitioners historically have been divided between finance and public relations. A national survey of 145 members of the National Investor Relations Institute and the Public Relations Society of Americas Financial Communications Section tested models and dimensions of practice to build theory. Results show that such investor relations officers predominantly practice the two-way symmetrical model and their work is characterized by the dimensions of symmetrical effects and—to some degree—two-way communication. Practitioners do not differ by their orientation to either finance or corporate communication/public relations. This study is the first to find the predominant practice of the normative model across its sample, thereby refuting long-standing criticism that the symmetrical model is a utopian ideal. The two-way symmetrical model does exist in the real world, and it can be found in the bastion of capitalism—publicly owned corporations in the United States.

The evolution of models of public relations: an outsider's perspective

Purpose – The purpose of this paper is to review the historical development of the models/dimensions of public relations. The extensive criticism of the models and dimensions is provided to better understand the strengths and weaknesses of the concept.Design/methodology/approach – The paper is based on a critical literature review to understand the roots of the models, their empirical tests, the modifications applied to the models over time, and finally the proposed shift from models to dimensions of public relations.Findings – The study concludes that the attempt to translate the public relations models into the dimensions failed because of a variety of conceptual and methodological flaws. Yet, the idea of developing dimensions of public relations is a viable and practical step in advancing public relations research; however, such dimensions must be continuous, dichotomous and measurable.Originality/value – Models of public relations first became a dominant theoretical perspective in public relations onl...

Investor Relations as a Public Relations Function: A State of the Profession in the United States

There are no majors, or even minors, in investor relations for undergraduate students in the United States. Yet, the association of investor relations professionals, the National Investor Relations Institute, has 4,300 members. The questions, then, become who works in the investor relations departments and investor relations agencies, where do they come from, and, more important, what does it mean for the status of investor relations as a profession? This study addresses these questions by conducting a random probability sampling of investor relations professionals to investigate their educational backgrounds, organizational structures, reporting relationships, and other variables. The study concludes that investor relations is still primarily a financial function: Investor relations professionals have financial or business backgrounds and report to the financial executives rather than to the communication executives or to the Chief Executive Officer.

Public relations scales: advancing the excellence theory

Purpose – This paper aims to develop five public relations scales as a substitutions for models/dimensions that were subject to much criticism. Based on this conceptual re‐evaluation of the excellence study, one of the dominant public relations paradigms, the manuscript proposes a measurement approach for the public relations practice.Design/methodology/approach – This is a conceptual paper based on a critical literature review aimed at understanding the errors in the public relations models conceptualization and their empirical tests. Based on this review, new and improved scales of public relations are proposed.Findings – The study developed five scales of public relations as substitutions for models/dimensions. The study proposed a measurement approach for the public relations practice. Finally, the study concluded that further research advancing the excellence scholarship is essential to better understanding the profession of public relations.Practical implications – This manuscript creates a measurem...

Nonfinancial Information in Investor Communications

This study conducts an empirical investigation of financial and nonfinancial information in investor relations communications. First, the study reviews various classifications of nonfinancial information and intangibles, then surveys U.S. investor relations professionals about the frequency and importance of communicating these types of information, and then compares these results with what an investment community expects from corporate disclosures. The study concludes that, overall, investor relations officers satisfy the informational needs of investors with one notable exception: although information about management is rated as one of the most important by investors, investor relations officers fail to share this information and fail to see its importance. At the same time, information about corporate social responsibility is rated as the least important by both investors and investor relations officers, and, as a result, this information rarely enters investor communications.

Investor relations measurement: an industry survey

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 worlds 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 assessm...

Strategic Financial Communication

Strategic communication emerges in many forms. In fact, any purposeful communications to advance a particular mission can be called “strategic communication” (Hallahan, Holtzhausen, van Ruler, Vercic, & Sriramesh, 2007). As evidenced by the fields of public relations, marketing, political communication, and others, many forms of strategic communication have their own histories and developing bodies of knowledge, as well as specific scholarly journals supporting a mission of building empirically based and theoretically sound scholarship in that field. However, one important form of strategic communication has not received the scholarly attention needed to fully contribute to the body of knowledge in strategic communication. This field of study is strategic financial communication. The lack of research devoted to strategic financial communication exists for several reasons. First, there is no single journal dedicated to financial communication—as a result, whatever scholarship gets published is often spread across a variety of journals from diverse disciplines, such as public relations, management, accounting, finance, and journalism, among others. This dispersion of knowledge creates a certain disconnect between publications and makes it difficult to develop a unified body of knowledge built on a solid foundation of prior scholarship. Second, even looking across this variety of journals and disciplines, the number of articles on financial communication is quite insignificant. The situation is slowly changing, as over the last 10 years more scholars have focused their attention on financial communication, but the number of publications in the field still pales in comparison with many other subfields of strategic communication. Finally, among those few articles dispersed across journals and disciplines, even fewer focus on building or testing theories and models of strategic financial communication. Many simply provide descriptions of the current status of the field or the people working in it. As a result, this special issue of the International Journal of Strategic Communication offers a unique opportunity to bring together scholars from various disciplines and backgrounds to start

Mixed-methods: measurement and evaluation among investor relations officers

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 worlds 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 metr...

The Investor Communication Strategies of Newspaper Corporations: A Computerized Content Analysis

The decline in readership and revenues from traditional newspaper business around the globe requires newspaper-owning corporations to find solutions to this problem while simultaneously communicating their vision for future growth to investors. This study investigates the narrative strategies used by newspaper corporations through a computerized content analysis of financial news releases. The results of the study indicate that the newspaper owners sound more certain in their communications with investors than expected by the normal range. In addition, some variations of the individual strategies showed unnecessary increases in language complexity and embellishment, which creates language that slows down the flow of information and de-emphasizes the actual actions performed by the management.