Financial Communication and Investor Relations PDF

Preview

Summary

JOUR 201 - Principles of Public Relations...

Description

Week 12 - Financial Communication and Investor Relations What is Financial Communication? - Strategies, tactics and tools used to share financial data and recommendations with investors and other interested parties - Investor relations is a specialty within financial communications Investor Relations - Companies with publicly traded stock are required to manage investor relations - But organizations of all sizes and types (including nonprofits) must build relationships with “investors” - and other key publics - Financial stability and transparency are essential to any organization’s reputation Financial Communication - The more you understand about financial communications (and finance, in general), the better you will be at your job, regardless of your passion and career path Financial/Investor Relations - Main task is to create and maintain investor confidence, building relationships with financial community by communicating corporate info - Key audiences: - Individual stockholders (through annual and quarterly reports, websites, annual meetings) - Financial analysts (fund managers, brokers, dealers, institutional buyers) - Financial media (Wall Street Journal, Forbes, Fortune, BusinessWeek, Bloomberg) - Securities & Exchange Commission (SEC) = government agency that oversees financial reports and information; oversees cases of insider trading - Sarbanes-Oxley Act = since 2002, requires more rigorous financial reporting practices including: - Reporting of stock trades by company insiders - Public reporting of CEO and CFO compensation - Form 10-K = annual report that must be filed with SEC (10-Q is quarterly); PR is often also involved in creating more general annual reports for wider audiences - Other financial/investor relations tasks: - Conference calls with financial analysts - Annual meetings in which stockholders discuss and often vote on eectiveness of corporate management - Build interest in and understanding of a company; report mergers and acquisitions, new management, contracts, products; build trust and positive relationships over time Two Examples…

-

-

Whole Foods was losing market share because of its “Whole Paycheck” image. Customers were buying organic food elsewhere, such as Trader Joe’s or Kroger. As customers lose interest, so do shareholders. The company lowered prices, but this did not seem to make a dierence...what else could they do? Similarly, Starbucks has struggled at some points because of the high price of its coee. What could they do to add value to their cafes and to boost the bottom line of the company overall?...