Interaction with internal audiences

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“Usually we interact with media only when special or short-term incidents happen since media do not follow a specific company. Most of the time, it is only when we announce sales results or an important issue is revealed on newspapers that journalists would come to us. It is indirect. It is like they follow the light we give, and they come to light source and report the issue.” (Interviewee No.5)

4.3.2 Interaction with internal audiences IR team members

IROs do not think communicate with or manage their IR team difficult since there are only few employees in the team. Usually there are less than three full-time IR practitioners in the team. “It is easier to communicate with few teammates.” (Interviewee No.3)

Some IROs do the work by themselves without IR helpers. They think it is still necessary to have some helpers if the company wishes to run an effective IR.

“Human resource is always insufficient. We still wish to hire a full-time professional IR to deliver corporate message. However, I also think about the problem from a different viewpoint. If this full-time IR has never participated in some corporate issues before, he will not have sufficient understanding of the company. It is a dilemma.” (Interviewee No.6)

Other departments

Since IR practitioners need to have a thorough understanding of almost everything about their companies, they communicate with people from different departments a lot to gather information. Intense interaction and communication with internal stakeholders is especially important for IR practitioners in a big company with lots of product lines and business units.

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Also, junior IR practitioners may encounter some difficulties asking for help from other internal stakeholders at the beginning. It takes more efforts communicating with others for a newly established IR team or a junior IR practitioner. Once the communication channels are completed, the time spending on negotiation reduces. Interviewees also mentioned that supports from CEO or CFO are crucial for IR practitioners to interact with internal stakeholders and gather information.

“This is a common problem for most IR. If your title is not senior or you do not receive enough support from you company, you might encounter some difficulty when asking for information. As a result, this is closely related to the empowerment to IR from the company. For me, it is not that difficult since I am able to participate in many meetings and receive some key message.” (Interviewee No.4)

Providing feedbacks to the internal stakeholders such as colleagues or top management in the corporation is equally important. If IR only takes information from others and never shares what he/she hears or reads from the investments community, the interaction might fail.

“The key is trust. Whether you can give these managers proper advice and will not disclose confidential message is important. It is an interaction instead of taking without giving.”(Interviewee No.4)

Public relations department

In some companies, both public relations and IR teams report to CFO even though they work independently most of the time. Three of the interviewees are directors of their teams, and their teams are responsible for both IR and public

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relations works (Interviewee No.4, 5, and 9).

One interviewee has to take care of works of IR, public relations and spokesperson because of the scale of the company.

“The company scale is small and do not have so much human resource [for a separate public relations department].” (Interviewee No.6)

“I think this is more convenient to integrate all the tasks. For example, when releasing monthly results, I would receive financial data first, writing news release, managing material information and disclose it. Also it would be more effective for me if journalists or investors come to ask about it. On the other hand, if PR and IR are separated, PR may only have a rough concept about the information since he/she only has the news release.”

(Interviewee No.6)

One interviewee said there is no in-house public relations department in their company either:

“It is mainly because we are a traditional ODM (original design manufacturer) company and our customers are different from OBM (own branding and manufacturing) companies. We do not need to do many PR events. Thus, communicating with media is actually one of IR’s tasks.”

(Interviewee No.13)

These IROs who also perform other public relations functions all believed that IR and public relations should interact and co-work with each other intensively especially when it comes to delivering financial information to media (e.g. writing monthly revenue news release) or planning special events (such as holding quarterly analysts meetings).

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“IR and PR should be two different independent department but rely on each other closely. The main co-work is company positioning. They have to communicate so as to deliver same message. The second key is building and managing corporate image, especially when crisis happens. The third one is holding special events. IR and PR have to work together and deliver same message, which is empowered by the top management. […] The other thing is CSR events. These are all the things that connect IR and PR closely.”

(Interviewee No.9)

In the rest of the interviewees’ companies, IR and public relations are in different teams and are responsible for different works. In some companies, IR and public relations both report to CFO, who is usually the spokesperson, (Interviewees No.1, 2, 3 and 10) while in some companies, IR and public relations are in totally different corporate structure. (Interviewees No. 7, 8, 11 and 12)

“PR to be event-driven, such as crisis management” (Interviewees No.4 and 5) while IR are more related to communicating financial themes with the investment community. All interviewees thought that the division of IR and PR mainly lies on the audiences they communicate with. IR communicates with the financial community while PR is responsible for media and the general public since “the language media used is very different from us.” (Interviewee No. 11)

Senior management team and board of directors

Besides communicating with people in different departments or business units, IROs interact with the senior management very often to have a complete concept of corporate strategies and operation situation.

“It is for sure that you must understand your company’s financial performance and current position. However, when it comes to future operation or outlook, you need to have a fluent communication system with

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the top management or you cannot receive the latest information.”

(Interviewee No.5)

As a bridge between the investment community and company, IROs give opinions and feedbacks from outside and provide information from market intelligence to the senior management.

4.4 The Issue of Power Relations