Information dissemination

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want quick and instant updates to write reports. […] For retail shareholders, who might be very short-term buyers, they only care about the stock price not the sales performance. You may need to listen to their complaint before you calm them down. You communicate in different ways with different external audiences. You have to know their needs and give what they want, not using a same method all the time.” (Interviewee No.8)

4.2.2 Information dissemination

“As the name ‘investor relations’ suggests, the ultimate goal for IR is to maintain relationships with the investment community, which is mainly through communication. Thus, communication is the most important task.” (Interviewee No.1)

This points out the fact that communication is the center of IR’s work, and information dissemination is the reason for communication.

Besides uploading material information to the Market Observation Post System (MOPS) to fulfill the requirement of the securities laws, company websites and email are the tools that used most often. In addition to numeric reports, some companies put videos of their conferences and quarterly analysts meetings on their websites as well.

Social media is a new topic drawing lots of attention. Nevertheless, in most interviewed IROs’ companies, they do not use social media to communicate or interact with the investment community. Many IROs also doubted if it is necessary or helpful.

“First of all, social media is not easy to control. It is important to ensure all information given out is consistent. Though social media can reach to different group of audiences and deliver information quickly, it

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is more difficult to control information quality and consistency from company’s point of view. On the other hand, audiences may think the same too. If companies think the channel is not easy to control, they tend to release standard information on it and avoid detailed information, which may be not very helpful for those who want to make thorough analysis.” (Interviewee No.9)

Interviewee No.13 also shared the same concern:

“There is one viewpoint I got from a speech that really makes sense.

It said, although twitter and Facebook is very popular now, do you really believe news from it so easily? There is too much information from social media, while the truth of the statements remains doubtful. Investors still need to reassure its authenticity from corporate websites or MOPS. That is, the official channels for corporate is still traditional media (websites, MOPS and email). […]Social media might be helpful for other corporate functions such as HR, but I think it is not for IR.” (Interviewee No.12)

Providing real-time information and feedback is one of the key features of social media, while IROs do not think it necessary either:

“I think there is still no urgent need to respond the markets so quickly through LINE or other social media. […] So far we do not see that need. Responding to investors through email or websites within a reasonable period of turnaround time, such as 24 hours, is enough.”

(Interviewee No.2)

Mass media is another important channel for IR. Financial journalists from newspapers are the key persons. Unlike institutional investors, the general public and retail shareholders rely heavily on mass media to receive corporate information.

Press release is the most commonly used tool to deliver news to journalists.

Although in companies with public relations teams, media related issues are

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taken care of by public relations, many companies have their IR and PR work together when releasing financial related news. For some companies without full-time public relations program, IROs need to write press release themselves.

“In our company, I am responsible for both PR and IR since I am also the spokesperson. In big companies, I think they would divide the two functions since they have different characteristics. […] It is convenient for me to handle and integrate information since I work as both PR and IR.

For example, when we announce monthly revenue, I am the first one to know it, writing news release and then spread it out. It is easier for me to handle if journalist or analysts ask related questions since I am fully informed. On the contrary, if IR and PR are separated, PR may only receive news release. He/she would not have deeper understanding of the real situation and the story behind financial numbers.” (Interviewee No.5)

Besides websites and media, IROs interact with the investment community directly very often. Investors and analysts visit IROs to do one-on-one meetings or group meetings to have a more thorough understanding about the company.

Conference call is also a common practice when face-to-face talking is not available. Talking with the investment community is a daily work for IROs.

In addition to passively taking meeting and phone call requests, many companies hold analysts meetings quarterly. IROs also participate in several conferences or non-deal roadshows (NDR) held by the investment banks every year. These are all basic activities that IROs do if the company wants to build up good relationships with the investment community.

When crisis or special issues happen, it is important for IROs to communicate with their external audiences initiatively as well.

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“The worst practice is to cover bad news. Transparency is important.

IROs should be able to communicate with investors timely, explaining the current operation and how the issue affects our company, and let them feel secure.” (Interviewee No.12)

These activities are important for corporations to communicate with the investment community. Through these methods, corporations maintain relationships with their current shareholders and discover their potential investors.