投資人關係在台灣企業中扮演的角色及權力關係 - 政大學術集成

全文

(1)國立政治大學國際傳播英語碩士學位學程 International Master’s Program in International Communication Studies College of Communication National Chengchi University. 碩士論文 Master’s Thesis. 立. 政治大. ‧. ‧ 國. 學. 投資人關係在台灣企業中扮演的角色及權力關係 The Roles of Investor Relations and their Power Relations in Corporations in Taiwan. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Student: Chia-Yi ChangChien 張簡佳怡 Advisor: Professor I-Huei Cheng 鄭怡卉教授. 中華民國 105 年 8 月 August 2016.

(2)

(3) ABSTRACT Investor relations (IR) has been playing an important role for publicly traded corporations for many years. In Taiwan, following the deregulation of foreign investment in the stock market, larger companies became more aware of the need of investor relations to bridge the investment community and the corporation. IR is a unique area that combines the skills of communication, public relations, and financial knowledge as well as business management. Nevertheless, there has been only limited academic research on this area, suggesting a gap between the academia and the industry. By in-depth interviews with experienced IR officers (IROs), the current study aimed to explore the situation of IR in Taiwan, including their roles and functions, as well as the issue of power relations in today’s corporations. The results showed that IR plays the role as a technician that delivers financial information as well as a manager that copes with the expectation of and the relationships with the investment community and the top management.. 立. 政治大. ‧ 國. 學. Additionally, most interviewees believed IROs should be valued as an. ‧. n. al. er. io. sit. y. Nat. important function in the corporation as they not only disseminate information to the financial media or financial community, but they also offer market updates and provide valuable consultations to the top management. In sum, the IROs who have a seat at the table can play an influential role and achieve two-way communication for their corporations and the external stakeholders.. Ch. engchi. I. i n U. v.

(4) ACKNOWLEDGEMENTS. 終於也走到了謝辭這一階段。一路來歷經許多轉折，但也同樣幸運地獲得許多幫助，此篇論文才得以誕生。首先要謝謝我的 IR 恩師 Julia Wang，這本論文才得以從無到有。因為 Julia 無私且耐心的分享與指導，我才得以從對於 IR 是什麼都似懂非懂到稍有掌握，在資料蒐集及訪談過程中更大力協助，讓我的論文得以順利進行。若沒有 Julia 的幫忙，論文無法開始也無法進行。謝謝我的指導老師鄭怡卉老師，老師總是說沒有幫到什麼，但論文能順利完成，都依靠老師的指導與專業。雖然我常常趕到最後一刻，老師卻總是包容，來來回回的討論與修改，耐心又仔細地給我許多建議及回饋。謝謝怡卉老師這些日子的照顧！. 立. 政治大. ‧ 國. 學. 謝謝口試委員孫秀蕙老師、陳一香老師，百忙之中願意抽空，在過程中給我許多寶貴的建議，使得論文有更完整的樣貌。. 暖的鼓勵！. ‧. 謝謝所有接受訪談的 IR officers，雖然因為匿名無法一一致謝，但若無 IR 前輩們豐富的經驗分享，論文無法完成。訪談過程我獲益良多，也謝謝您們溫. Nat. al. er. io. sit. y. 感謝我的同事 Irene、Vicky 及 Olive，在這一年間不斷地鼓勵我，在工作上生活上都給了我非常多的支持和照顧，能在這樣的團隊工作真的非常幸運。. n. 謝謝我大學與研究所的朋友們，在論文寫作期間給我好多陪伴，聽我抱怨給我鼓勵，雖然只是隨便閒聊，卻舒緩我許多不安與壓力。謝謝庭豪一路來無微不至的照顧，還要包容我的暴躁與壞情緒，辛苦你了，謝謝你！. Ch. engchi. i n U. v. 最後，要感謝我的家人。謝謝爸媽生我育我，即使一路上我總是讓你們擔心，你們永遠毫無保留地支持我愛我。謝謝妹妹和哥哥，雖然各自因為課業工作不再像小時候常在一起，你們的關心和幫忙卻從沒有減少。. 謹以此論文獻給所有關心我、幫助我的每一位。. 佳怡 2016 年夏. II.

(5) Table of Content CHAPTER 1 INTRODUCTION…………………………………………….……….1 1.1 Investor Relations……………………………………………………………1 1.2 Purpose of the Study…...……………………………………………………...3 CHAPTER 2 LITERATURE REVIEW…………..………………………………….7 2.1 Investor Relations Overview……………….….………………………………7 2.1.1. History and definition of investor relations………………………….6. 政治大 2.2 Communication and Investor Relations…………………..…………………12 立 Investor relations research…….………..…………………………..9. 2.2.1. Communicating with external stakeholders…………………………13. 2.2.2. Internal relationship management….……..………………………...18. ‧ 國. 學. 2.1.2. ‧. 2.3 The Issue of Power Relations..………………..….…………………………..20. sit. y. Nat. 2.4 Roles of Investor Relations...…………………….…………………………..22. io. er. CHAPTER 3 METHODOLOGY……………….…………………………………..25 3.1 In-depth Interview…………………………………………………………...25. al. n. v i n Semi-structured C interview….………………………………………...25 hengchi U. 3.1.1 3.1.2. Interviewees….……………………………………………………..26. 3.2 Interview Procedure….………………………………………...…………….29 3.3 Interview Questions….….……………………………………...…………….29 3.3.1. Investor relations practitioners in Taiwan……………...…………….30. 3.3.2. The roles of investor relations……………..…………...…………….30. 3.3.3. “Having a seat at the table”………………..…………...…………….32. 3.3.4. Insights on IR practice in Taiwan industry...…………...…………….32. CHAPTER 4 RESULTS.……………….……………...……………...…………….33 4.1 Backgrounds of Investor Relations Officers………….………...…………….33 III.

(6) 4.2 Functions of Investor Relations…………...………………………………….34 4.2.1. Information production……………………………..………………..35. 4.2.2. Information dissemination ……………………………..…………….38. 4.2.3. Information collection………………………………….…………….41. 4.2.4. Market intelligence …………………………………………………..42. 4.2.5. Expectation management………………………...…………………..42. 4.3 Investor Relations’ Audiences………………………………………………..43 4.3.1. Interaction with external audiences……………….………………43. 政治大 4.4 The Issue of Power Relations………………………………...………………49 立. Interaction with internal audiences……………………………….45. 4.4.1. Investor relations in corporate structure……………...………………49. 4.4.2. “Have a Seat at the decision-making table” ………………...……… 51. ‧ 國. 學. 4.3.2. ‧. 4.5 Investor Relations in Taiwan……………...………………………………….54 Current situation…………...……………………………………….54. 4.5.2. Future development……….………………………………………….56. er. io. sit. y. Nat. 4.5.1. CHAPTER 5 DISCUSSIONS AND CONCLUSIONS……………………………58. al. n. v i n Ch 5.1 Discussions…………………………………………………………………...58 engchi U 5.1.1 Information, communication function and power relations………....59. 5.1.2. Roles of Investor Relations……………………...……………………62. 5.1.3. Investor relations in Taiwan………………………………………….63. 5.2 Conclusions…………………………………………………………………..64 5.3 Limitation and Future Research………………………………………………65 CHAPTER 6 REFERENCES……..……………………...……….………………67 Appendix: Interview transcripts………………………………………………….…...73. IV.

(7) List of Tables and Figures Table 1: List of the Interviewees……...………………………………………………28 Figure1: Information flow……………………………………………………………61. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. V. i n U. v.

(8) CHAPTER 1 INTRODUCTION. 1.1 Investor Relations Investor relations (IR) is a profession that integrates knowledge of communication, finance, industry, business administration, securities law and etc. Communication is the one that takes the greatest portion of an IR practitioner’s work. Scholars valued IR as a function of corporate public relations (PR) field or strategic. 政治大 academic research (Laskin, 2009; Peterson & Martin, 1996). 立. communication even though it is one of the least studied topics in communication. ‧ 國. 學. The communication work of IR is complicated since IR has to talk with diverse audiences both from inside and outside the corporation through different tools and. ‧. acts as the bridge between them. One of the most important external target audiences. sit. y. Nat. is the investment community. IR has to build up a strong connection with them, which. n. al. er. io. is also the core of an IR practitioner’s mission. According to the IR survey conducted. i n U. v. by ER Insights in 2015, 88% of respondents thought that the most critical fact. Ch. engchi. determining IR success is “an IR’s ability to build strong relationships with investors and analysts” (EY, 2015, p.5). How the investment community views a publicly traded company greatly influences its stock price and further affects its operation. A well-executed IR program can gain external stakeholders’ confidence and trust in the company. This positive recognition influences investors’ willingness to obtain the company’s stock, enhancing the stock price and liquidity, and results in a higher corporate bond credit rating (Kim & Jeon, 2015). On the other hand, with a lower stock price, a company’s cost of capital tends to be higher since it can only obtain few funds from per share and needs to find other ways to raise capital. When 1.

(9) the stock price is too low or the structure of the shareholders is not reasonable, a company can also have higher potential to attract hostile takeover (National Investor Relations Institute, 2002; Bragg, 2010). As a result, IR has become a profession to be reckoned with. By constantly communicating with the investment community, IR provides accurate and real-time information of the corporation to investors. This secures that the investor community obtains first-hand and instant information instead of historical information from media or even rumors. Investors will be more willing to acquire a company’s stock, which is. 政治大 markets and maximize its market 立 value.. important for a publicly traded company that wants to compete for capital in stock. ‧ 國. 學. Interestingly, IR was expected to achieve different goals when it was created at first. The profession of IR has been adopted by corporations for more than forty years. ‧. in early developed markets. Its origin can be traced back to 1960s in the United States.. y. Nat. sit. IR was more like a marketing function, and the ultimate goal for an IR practitioner is. n. al. er. io. to sell the company’s stock to the general public. IR put advertisement on mass media. i n U. v. and worked with sell-side analysts and brokers to promote their companies’ stocks (Silver, 2004).. Ch. engchi. As the system of capital market gradually grew mature, the profession transformed into a more complex role. The most important audience of IR was no longer retail investors (the general public) but the institutional investors. The securities law for fair securities exchange also became more sophisticated than before. To fulfill the need of professional investors, analysts and the requirement of securities regulation, IR spent more time communicating with different investment communities. Today, a qualified IR practitioner is expected to have sufficient understanding of the company and the industry, and knowledge of the stock markets and related 2.

(10) regulations to serve as the bridge between stakeholders inside and outside a corporation. The tasks of IR become more complex than before. Different from IR’s long history in mature markets, having IR included in corporate structure is still a comparatively new phenomenon that appeared in the late 1990s in Taiwan. This is closely related to government’s foreign investment opening policy. As more qualified foreign institutional investors (QFII) entered Taiwanese stock market in the 1990s, their requirements for transparent and in-time information release prompted the establishment of the profession in many publicly traded. 政治大 (TWSE) and the institutional 立investors in recent years also intensifies the need to have companies. The concept of corporate governance urged by Taiwan Stock Exchange. ‧ 國. 學. a coordinator responsible for communicating with the investment community and satisfying the disclosure requirements. The profession has grown much more mature. ‧. compared with how it was twenty years ago in Taiwan. It is now one of the key. n. al. er. io. sit. y. Nat. characters that brings foreign capital to invest in Taiwan as well.. 1.2 Purpose of the Study. Ch. engchi. i n U. v. There are regular conferences and surveys held by securities companies, financial institutions and IR organizations such as NIRI and IR Magazine for IR officers (IROs) to enhance IR efficiency. This has been practiced in industry for years, while academia pays little attention to the profession. There is no college or program offering courses related to IR or financial communication in Taiwan or the United States (Laskin, 2014). It is also one of the least studied topics by researchers.. 3.

(11) Communication scholars considered IR to be one type of public relations and believed that IR can function well only when tying together and co-working closely with the public relations. Nevertheless, there is little research on IR from communication school. Given that financial knowledge, a very different field that is usually neglected in communication related works, plays an important part in IR practice, it is not surprising that IR is not among the mainstream topics in communication studies. On the other hand, researchers from college of commerce do not pay much. 政治大 price and financial performance. attention to the profession either. Most of studies focused on the effect of IR, how IR. 立. influences a company’s stock. from business. ‧ 國. 學. administration and accounting’s points of view (e.g. Brenna & Tamarowski, 2005; Bushee & Miller, 2012), and neglected the important communication and relationship. ‧. management elements of the profession.. y. Nat. io. sit. Although the financial market has become much more active than before in. n. al. er. Taiwan and corporations have gradually become aware of the important of. i n U. v. maintaining relationships with investment communities, the roles and functions of IR. Ch. engchi. are still vague and the concept of building up relationships with shareholders is undervalued in some corporations. This limits IR practitioners’ performance and hinders both corporations and their stakeholders’ benefits. Indeed, there are some scaled corporations having well-established IR programs in their corporate structure and securities companies also help companies improve their communication with investors in Taiwan, the situation in the local academic fields has lagged behind for long. There are not many studies on the topic of IR from either college of communication or business school. A few theses from college of commerce (e.g. 陳淑珠, 2006; 黃品方, 2010; 劉倩妏, 2004; 曾羨雯, 2010; 林子 4.

(12) 均, 2014) discussed about IR; nevertheless, the majority of them took general investors or other professional managers as their research targets instead of looking into IR itself. Only Lin (林子均, 2014) and Huang (黃嘉怡, 2012) included IR practitioners to participate in their research. To narrow the gap between the development in industry and academia research of IR, the current study aims to obtain a preliminary understanding on the present practice of IR in industry in Taiwan. By in-depth interviews with experienced IROs, this study hopes to draw a basic picture of IR’s functions and its position inside. 政治大 relationship management’s立 point of view, which are important but usually neglected. Taiwanese corporations and clarify its roles and importance from communication and. ‧ 國. 學. IR features.. In addition, IR’ power relations in corporate structure is also discussed in this. ‧. study. Corporate information is what the investment community cares about most, and. y. Nat. io. sit. it is one of the most important tools for IR practitioners. If IR practitioners are. n. al. er. excluded from the senior management level, they cannot obtain useful and accurate. i n U. v. information and will have difficulty building up relationships with their audiences.. Ch. engchi. As a bridge between investment communities and the corporation, IR also serves the role that brings information on the street back to the corporation. Nevertheless, if there is no direct communication channel to the top management, IR cannot deliver opinions from outside effectively and provide useful information. These may harm a corporation’s reputation on the stock market, affecting investors’ expectation and reflect on its stock price. With more research on the topic of IR, the industry and academia can have more understanding of the profession, utilizing IR function and further improve the. 5.

(13) relationship between corporations, stakeholders, and IR practitioners and pursue a win-win situation.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 6. i n U. v.

(14) CHAPTER 2 LITERATURE REVIEW. 2.1 Investor Relations Overview 2.1.1 History and definition of investor relations IR is a relatively young profession appearing in the early 1950s, the period of economic boom after World War II, when corporations became aware of the fact that people had cash in their hands to be invested. Companies had to make an. 政治大 Relations” in 1953 and made 立. effort to compete with each other for capital. General Electric (GE) created the profession “Investor. it function as handling. communication with all shareholders. While, the tasks of IR were mostly given to. ‧ 國. 學. press agents to promote companies’ names to the public through mass media. IR. ‧. practitioners at that time played the role as an advertiser or one-way information. sit. y. Nat. provider/ stock sales only (Laskin, 2010).. n. al. er. io. In 1970s, the structure of stock market changed and was dominated by. i n U. v. professional investors. The traditional method of advertising to the general public. Ch. engchi. did not seem effective to this particular audience group. Investment professionals wanted more detailed information of a company from different dimensions in addition to financial performance. They turned to chief financial officers (CFO) for help instead of IR practitioners who were not able to answer their questions. With this request change, corporations adjusted their expectations of IR practitioners, and this prompted them to turn their focus from advertising to information disclosure and to fulfill the needs of the investment community. Communicating with investors was not a peripheral component of the CFO’s responsibility anymore. It became a professionalized work for IROs and thereby urged the birth. 7.

(15) of modern IR practice. This interpersonal nature of communication also transformed the original one-way communication practice of IR into a two-way information stream (Laskin, 2014; Marcus, 2005). IR turned into a more established functional profession for many firms gradually in 1980s (Rosenbaum, 1994; Useem, 1993). With the continuous progress of the financial market, corporate governance, securities laws and different demands from the investment community, IR was also changing to keep up with the trend to respond to the needs.. 政治大. Today, IR has become a profession very different from what it used to be at. 立. the beginning. IR was described as “a marketing activity” that aims at providing. ‧ 國. 學. “an accurate portrayal of a company” and makes “a positive effect on a company’s value” by the National Investor Relations Institute (NIRI) in 1996. While in 2003,. ‧. NIRI changed their definition for IR as “a strategic management responsibility”. y. Nat. sit. involving two-way communication on information of both financial and. n. al. er. io. non-financial dimensions to achieve fair valuation of a company’s securities 1. i n U. v. (NIRI Board of Directors, 1996, 2003). This change of definitions overviewed the. Ch. engchi. different roles and goals of the profession in corporations in different times. Tuominen (1997) and Dolphine (2004) described IR as a planned and continuous activity that is to build up relationships with the financial community, including current and potential investors and stakeholders through long-term interaction with them.. The full definition of IR by NIRI in 2003: “A strategic management responsibility that integrates finance, communication, marketing and securities law 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.” 1. 8.

(16) The concept of maintaining good relationships with the investment community can be examined through several specific goals for IR. Bragg (2010) sorted out five goals for IR—alter perception of the company, increase analyst coverage, increase geography coverage, reduce stock price volatility, and manage existing investors. These are all for the ultimate reason why having IR profession: “to maximize a company’s market value” (p.2).. 2.1.2 Investor relations research. 政治大. Although scholars believed that IR should be under the communication field,. 立. the communication academy (Laskin, 2009).. 學. ‧ 國. the financial end of public relations, it is in fact one of the least studied topics in. ‧. This might be related to how IR is usually executed and positioned in. sit. y. Nat. practice. In industry, most corporations consider IR more related to finance or. io. er. accounting instead of communication or public relations. Peterson and Martin (1996) attempted to evaluate IR as public relations function in 1996, and the result. al. n. v i n showed that the majority ofC IR practitioners wereUtaken as financial function in hengchi. corporations instead of public relations function. Laskin (2014) replicated the study to see if the profession has changed over the past 15 years but the results were very similar. IR institutes or publications such as NIRI and IR Magazine hold annual survey of IR practice across the world every year, and the results are basically similar over the years. These studies investigated the situation of IR’s practice in industry by survey. In addition to quantitative studies, there are also some research took qualitative approach. Dolphin studied (Dolphine, 2004) on IR’s organizational role and. 9.

(17) concluded IR “as part of a co-ordinated marketing communication strategy” (p.25). Hockerts and Moir (2004) analyzed the roles of IR when talking about the topic of corporate social responsibility (CSR). These studies conducted in-depth interviews with IR practitioners, which provided detailed opinions from their practical experiences. In addition to IR’s role study and survey on the current trends of IR practitioners, there were also studies focusing on some other topics such as Laskin’s research on how IROs evaluate and measure their performance.. 政治大 influence the formation 立 of a company’s image.. Hoffmann and Fieseler (2011) attempted to identify how non-financial factors. ‧ 國. 學. Nevertheless, in terms of the amount, academic research on IR is still limited. The situation is similar in Taiwan. Not only academic research on the profession is. ‧. little, even IR itself is a young profession in Taiwan industry.. y. Nat. er. io. sit. IR appeared in Taiwan in the late 1990s thanks to government’s gradual deregulation of investments from qualified foreign institutional investors (QFII).. al. n. v i n CRegulations After a series of revising the Investment in Securities by h e n g cGoverning hi U Overseas Chinese and Foreign Nationals, Taiwan welcomed more funds from. foreign investors. Taiwan Stock Exchange became unprecedentedly active. Since then, publicly traded companies started to see the importance of competing for capital from around the globe. They saw the need of having someone who can speak English to communicate with foreign investors. As IR gradually transformed and had more interaction with international institutional investors and invest banks, the profession developed rapidly and kept. 10.

(18) up with the global trends. More publicly traded companies became aware of the importance of IR and included the profession in their corporate structure. While, most people outside the professional investment community still have no idea what IR is even if the profession has been introduced to Taiwan industry for about twenty years. There was also very little research on the profession in Taiwan. A few master’s theses from commercial college studied this topic by examining the relation between IR performance and corporations’ QFII proportion in shareholder structure, the stock price, and other financial status (陳. 政治大 general investors or 立 institutional investors as their subjects rather than IR 淑珠, 2006; 黃品方, 2010; 劉倩妏, 2004; 曾羨雯, 2010). These studies had. ‧ 國. 學. practitioners. Huang (黃和傑, 2006) studied how investor relations influenced the performance of the corporation. He compared the data three years before and. ‧. after the establishment of IR departments in 33 Taiwanese publicly traded. sit. y. Nat. companies and found that there were significant differences on QFII holdings. n. al. er. io. percentage and the number of analyst reports. Lin’s thesis (林子均, 2014) had a. i n U. v. similar topic but with a different research method. He investigated the. Ch. engchi. establishment of IR department by survey and discussed its correlation with the company’s performance in the stock market. Few researchers included IR practitioners in their studies. The study of Huang (黃嘉怡, 2012) was aimed to examine whether IR is related to a company’s performance on the stock market. With a survey of 48 IR practitioners (out of 273 in the sampling frame), it was concluded that the results showed IR management is correlated with QFII holdings and the Three Primary Professional Investment Institutions (三大法人持股). Although the findings suggest the importance of IR,. 11.

(19) the results may not be widely generalized with the smaller sample size and the overall research mostly focused on the effects of IR instead of the profession itself. Another study by Hung (洪智慧, 2004) was the only one that discussed the topic of IR from communication’s point of view. She explored how corporations used public relations strategies to manage the relationships with the investment community. The study focused on the use of public relations strategies and took PR practitioners from automotive crash part manufacturing companies as the target group and conducted in-depth interviews. Hung stated that creating appealing. 政治大 She also mentioned about 立the use of other communication channels such as press topics to communicate with mass media and institutional investors is important.. ‧ 國. 學. conferences, analysts meetings and corporate websites are all useful tools to manage the relationships with investors. Although communication scholars. ‧. believed that IR is within public relations’ field, the work of IR is usually separated. sit. y. Nat. from public relations in practice. It might be more specific if the study can focus. n. al. er. io. on IR practitioners and their own strategies.. i n U. v. Since the topic of IR is neglected in communication and the public relations. Ch. engchi. field for long in Taiwan, this paper attempts to discuss the roles of IR in Taiwan through in-depth interviews with experienced IROs and explore the current situation of the profession from the standpoint of communication.. 2.2 Communication and Investor Relations Bragg (2010) stated that “the work of the IR officer (IRO) centers on communicating the company’s current and potential market value to investors” (p.1) at the very beginning of his book, which pointed out the importance of. 12.

(20) communication for IR professionals. Although it requires knowledge of different fields to execute different IR tasks, communication is the thing that takes the most important position in IR’s work. Scholars agreed that IR should be the communication function about financial themes instead of the financial function related to communication (Laskin, 2004; Regester, 1990). In Hoffmann, Tutic and Wies’ study (Hoffmann et al., 2011) on how educational diversity affects IR teams’ performance, the result supported their argument that “the presence of marketing and communication experts in IR teams. 政治大 in practice, the situation is 立 usually the opposite. IR has been taken as a finance-related. contributes to higher IR quality and lower shareholder activism” (p.311). Nevertheless,. ‧ 國. 學. work most of the time and drifted away from public relations even if it is within the public relations paradigm (Laskin, 2014; Peterson & Martin, 1996).. ‧. Neglecting communication function of IR may harm the quality of information. y. Nat. io. sit. delivery or even causes stakeholders to have wrong impressions toward the. n. al. er. corporation. There is a need to look into the communication dimension of the profession and understand its value and importance.. Ch. engchi. i n U. v. 2.2.1 Communicating with external stakeholders In many corporations, IR serves the role as the spokesperson or acting spokesperson. They are responsible for drawing up information to deliver to external stakeholders. IROs are considered as management representatives as well. Their words represent the official opinions from the corporation. As a result, IR has to ensure the accuracy and properness of information he/she gives.. 13.

(21) Financial report is an important information to investors. Financial statements provide information about the financial position, performance and changes of a company and are very helpful for investors to analyze the company and make investment decisions (International Accounting Standard Board [IASB], 2010). Financial information disclosure is also one of the main reasons for many companies to set up the position of IR. IR practitioners disclose financial statements regularly through different publications and their company’s websites to satisfy the needs of the investment community and the requirement of securities laws.. 政治大 Asides from financial 立 information, abundance of research indicated that. ‧ 國. 學. non-financial factors significantly affect a company’s market performance. A survey conducted by Ernst and Young Center for Business Innovation (1997). ‧. showed that financial numbers are lagging information while non-financial. sit. y. Nat. information is more useful when predicting a company’s future development.. n. al. er. io. Baruch Lev (2001) also supported the statement, saying that financial statement. i n U. v. cannot precisely capture the true market value of a company. Thus, capital market. Ch. engchi. participants actually take non-financial factors as important references when analyzing a company (Gabbioneta, Ravasi & Mazzola, 2007). Non-financial information usually plays an influential role in a company’s earnings and stock performance (Farragher et al., 1994). In Hoffman and Fieseler’s research (2012), they concluded eight categories of non-financial information that equity analysts take into consideration when forming an impression on a company, including its stakeholder relations, corporate governance, corporate social responsibility, reputation, brand, management quality, and strategic consistency. 14.

(22) It relies on IR to integrate all the untrimmed financial and non-financial information to an easy-to-understand story and deliver it to stakeholders and build up a positive corporate image, which is the “total impression” of the company (Dichter, 1985). The external audiences for IR are diverse. At the very beginning, IR was designed to attract the general public to buy the company’s stock; while nowadays, the professional financial community is the group that IR interacts with most often, and this task is even considered as part of corporate strategy (Dolphine, 2004).. 政治大. Different from retail shareholders, professionals from the investment market. 立. require more detailed information of the company. They want accurate and the. ‧ 國. 學. latest information about the company and its position in industry. To respond to their needs, IR must have an adequate understanding of the current situation of the. ‧. industry as well as the company’s venders, costumers, and peer companies.. y. Nat. er. io. sit. Analysts from the sell-side and portfolio managers (or the funds’ own analysts) from the buy-side2 usually visit IROs and keep an eye on the company.. al. n. v i n In addition to them, there areCalso institutional salespersons from the sell-side that hengchi U. contact IR professionals very often. Institutional salespersons often serve as the bridge between professional investors/analysts and IR practitioners, and arrange one-on-one meetings or conference calls for them. They also play the role as brokers and recommend professional investors/analysts worth visiting companies. That is, building up relationships with them is also important since they not only help contact with current shareholders but also bring potential investors.. 2. The sell-side, including investment bankers and brokerage firms, is the middleman between funds and companies. They employ analysts, stock traders, investment bankers and institutional salespersons. The buy-side is the entities that manage capital funds and give orders to the sell-side to buy or sale stocks (Bragg, 2010). 15.

(23) In such a dynamic industry like securities market, information is the thing that matters. Financial professionals transfer information from one to another quickly and constantly, and massive information exchange turns into rumors from time to time. They want to clarify rumors from the official to confirm what the situation really is. It is IR that serves as the contact to communicate with them, clearing their doubts and uncertainty, and rebuilds their trust and confidence. The instant information delivery is especially important when an unexpected event happens or after announcing significant news. In other words, crisis management is. 政治大 Communicating and 立interacting with these institution investors is important. also an important issue for IR.. ‧ 國. 學. for a company. It is believed that a company with a well-organized and controlled IR program may increase institution investors’ interests and willingness to invest in. ‧. (Craven & Marston, 1997).. y. Nat. io. sit. By participating in roadshows, conferences, and holding group/one-on-one. n. al. er. meetings or conference calls, IR practitioners respond to requests from. i n U. v. shareholders, analysts, and brokers directly. These are also the tools that IR. Ch. engchi. practitioners most often use to interact with their external target audiences (Laskin, 2006). According to the survey conducted by BNY Mellon in 2012, IROs from around the globe undertake 145 meetings with investment professionals and participate in about eight broker-sponsored conferences both inside and outside their home market per year. (BNY Mellon, 2013). Besides the professional investment community, media and the general public is the other group of external audience for the corporation. The general public, who seldom has direct contact with IR practitioners, relies on media to get company’s information mostly. The professional investment community also act 16.

(24) on information from media. Media, especially the financial media, plays a significant role in the investment process, and is thus an important partner for IR. Reporters are “at the best position to release favorable coverage” (Bragg, 2010, p.63). The basic tactic is to provide a press release to major media whenever a significant company event is announced or the latest company earning information is released. IR practitioners also have to prepare for answering journalists’ questions and interviews. The long-term goal is to build up credible relationships with those journalists, which is really difficult since journalists work. 政治大 provide favorable coverage 立all the time (Bragg, 2010).. in a very different practice from the investment community and they do not. ‧ 國. 學. Davis (2006) studied on the role of the mass media in IR, and divided the communication process into three stages: “production and dissemination of. ‧. financial information, media coverage, and media-source relations” (p.7). It takes. y. Nat. io. sit. public relations and communication skills to deal with the media and the. n. al. er. investment community since any misleading information or even positive/negative. i n U. v. attitudes can lead to undesirable consequences. Silver (2004) proposed that the. Ch. engchi. combination of public relations and IR contributes to a favorable performance in the stock market and also enhances corporate image in the long run. Nevertheless, IR activities are usually separated from public relations. Laskin’s investigation (2006) revealed that only 7% of the Fortune 500 companies has IR activities managed by the communications or public relations department. The backgrounds of IR practitioners are also not surprising; the majority of them have business-related education rather than communication education.. 17.

(25) Some corporations tend to separate the mission of media relations from IR since they believe issues related to mass media should be taken care of by public relations. However, when it comes to financial media, it becomes a problem that who should manage the communication process. Is media included in IR’s external target audiences? Who are the major external audiences for IR? How do IR interact with them? It is an interesting topic to know the situation in Taiwan and how IR practitioners communicate and maintain relationships with external audiences. RQ1.1: Who are the major external audiences for IR in Taiwan?. 政治大. RQ1.2: How do IROs interact with the investment community?. 立. RQ1.3: How do IROs interact with media?. ‧. ‧ 國. 學. 2.2.2 Internal relationship management. y. Nat. io. sit. Interacting with internal audiences is another important issue for IR. n. al. er. practitioners. As mentioned in the previous section, non-financial information is. i n U. v. equally important as financial information to the investment community. To have a. Ch. engchi. complete understanding of everything about the corporation, IR has to consult experts of the field from different departments to collect accurate information and then integrates and delivers to external audiences (Gregory, 1997). In addition to information gathering, IROs also have to manage information delivery. In many companies, IROs are usually included in the spokesperson team. It is crucial for them to make sure the statements from all the key persons in the corporation are consistent and proper to build up the corporate image and maintain the company’s credibility since they are the representative of the company’s opinions. As a consequence, the IR team has to coordinate with people who might 18.

(26) have the chance to interact with crucial external stakeholders, from members within the IR team, the public relations department, heads of business units, to chief executive officers (CEO) and members of board of directors (BOD), to ensure the consistency of information and the story (Bragg, 2010). Besides consistency, story-telling is not a task casually executed. Dolphins’ research (2004) suggested that IR is not only a significant role in processing the total corporate communication message but “plays a core role in the strategy of the corporation itself” (p.33). IR, as a spokesperson, should be aware of its role as one. 政治大 company representatives立 is well-informed and follows the strategy.. of the members of making communication strategy, and should make sure every. ‧ 國. 學. As “the focal point of two-way communications between the company and the ‘Street’” (Brown, 1995, p.45), delivering information from outside to the top. ‧. management and the board is equally important. According to the survey by Laskin. y. Nat. io. sit. (2006), providing information to the top management or other departments is the. n. al. er. internal activities that IR practitioners most often do. IR’s close interacting with. i n U. v. investors can be helpful for the company to make strategies that are more. Ch. engchi. welcomed by shareholders (Ryder & Regester, 1989). Market intelligent is also one of the routines that IR practitioners do. They study peers’ information and industry trends all the time to grasp what is going on in the industry. IR’s knowledge about the industry and peer companies can also provide valuable insights to the management team (BNY Mellon, 2013). To sum up, information providers from different departments, IR team members, the public relations department, and the top management (usually the “C-level” or members of BOD) are ideally the key internal stakeholders for IROs to execute their mission and transfer information smoothly. While in reality, the 19.

(27) practice may differ from company to company, and what are the keys to making information delivery system inside the corporation effectively is a question worth discussing to improve the quality of IR practice. The following research questions are thus proposed: RQ2.1: Who are the major internal audiences for IROs in Taiwan? RQ2.2: How do IROs communicate with internal audiences? RQ2.3: How do IROs interact with public relations department/team?. 政治大 2.3 The Issue of Power Relations 立. ‧ 國. 學. The power relations issue is especially important for IR. Having control of corporation and industry information is a pivotal tool for IR practitioners and is one of. ‧. the reasons why power issue is important to IR. In addition to acquiring financial and. y. Nat. io. sit. technical information from people in different departments, IR also has the need to. n. al. er. participate in the meetings of the top management to be fully informed of corporate. i n U. v. strategies. Ragas, Laskin and Brusch (2013) believed that IR needs to participate in. Ch. engchi. the decision-making process instead of receiving second-hand information afterwards. On the other hand, in addition to grasping information, receiving news from outside and providing to the management team is also a precious function that IR does (Marston & Straker, 2001; Dolphine, 2003). Providing precious information from shareholders and their professional insights on the stock market and the industry should be valuable for the inner circle. Nevertheless, BNY Mellon’s (Band of New York Mellon) 2012 survey showed that almost half (45%) of the senior-most IROs in Taiwan do not attend board meetings. 18% of them attend the meetings but do not present; 16% of them present sometimes and 21% of them present frequently, similar 20.

(28) to the global average. 43% of the IROs do not attend board meetings (BNY Mellon, 2013), implying that some IROs may have difficulties to provide consultations directly to the board. Whether IROs can utilize the value of two-way communication functions relies on how IR practitioners themselves or their direct supervisors are valued in the corporation. This is also related to the idea of practitioners as a technician role or as a manager role (Dozier, 1984). The differences between a manager and a technician is. 政治大. on problem-solving and strategic-thinking capabilities. Practitioners with managerial. 立. of a junior IR practitioners and an IRO must be different.. 學. ‧ 國. skills are more likely to be included in the decision-making table. The power relations. ‧. It is not surprising that IROs generally believe themselves should have a seat at. sit. y. Nat. the table with the top management instead of serve as a technician role (Dozier and. io. er. Broom, 2006; Ragas, Laskin & Brusch, 2013). A survey by Hong and Ki (2007) on public relations practitioners’ opinions toward IR also showed a similar conclusion.. al. n. v i n C h that counselingUwith the top management is the Public relations practitioners believed engchi most important IR activity. Direct involvement with the top management team helps IROs to achieve their goals and tasks effectively. The dominant coalition, originated from organizational theory, serves as the main concept to discuss the issue of power relations. The dominant coalition is about power-control perspective (Pfeffer, 1981; Simon, 1976) and usually consists of the top management team that determines strategies and goals for the organization (Cyert & March, 1963). Bachrach and Lawlwer (1980) and French and Raven (1959) believed that this power comes from several sources including “authority, coercion,. 21.

(29) charisma, expertise, information, reward, and sanctions—to influence decisions” (as cited in Berger, 2005, p. 7). To sum up, the keys of whether IR can be included or gain a seat in the dominant coalition are: (1) if management understand the value of the program, and (2) the professional competence of the practitioners (Berger, 2005). Mintzberg (1983) believed that the power structures and processes in modern organizations must be fully explored or they would not improve and function better. Berger and Reber (2006) took the same stance when discussing the power relations of. 政治大. public relations profession. However, the question of power relations of IR remains. 立. unclear. The situation of the practice in Taiwan might be even more different since IR. ‧ 國. 學. is a comparatively young profession here. How influential IROs really are in their corporations and how they are valued is closely related to whether they can fully play. ‧. their roles effectively. It would be interesting to see how IROs perceive the issue of. y. Nat. er. io. in their corporations.. sit. power relations, how they are valued and how they interact with the top management. al. n. v i n C hthe power relations RQ3: How do IROs perceive of themselves and the top engchi U management in their corporations?. 2.4 Roles of Investor Relations Understanding the power relations issue also helps define the roles of IR. Organizational roles are “recurring actions of an individual appropriately interrelated with the repetitive activities of others so as to yield a predictable outcome” (Katz & Kahn, 1978, p.189). Organizational roles guide practitioners what and how to do, and. 22.

(30) summarize the special features of organizational member’s activities and behaviors (Dozier & Broom, 2006). At the beginning, scholars tended to focus on IR functions of maximizing the market value of the firm. Marcus and Wallace (1997) then gave a different approach and defined the three phrases of IR roles. It was first a communication role for delivery the company’s actions and then turned to a financial role focusing on financial functions and financial results. Finally, IR transformed into an active marketing role that promote their companies.. 政治大. Gregory (1997) and Dolphin (2004) defined the role of IR in a different way,. 立. considering IR as a strategic role in the corporation. They suggested that IR plays a. ‧ 國. 學. crucial part of the corporate communication strategy, which usually aims at forming a positive corporate image to stakeholders.. ‧. sit. y. Nat. Laskin (2014) tried to investigate IR as a public relations function, which is. io. er. categorized by communication scholars, while the result showed that IR were valued more on its financial role in practice.. n. al. Ch. engchi. i n U. v. The boundary-spanning role is also an important concept when discussing the role of IR. IR serves as the liaison between the company and the financial community, delivering information between inside and outside the organization (Grunig & Hunt, 1984; Ragas, 2011). The roles of public relations have been an extensively studied topic in the public relations field. To discuss deeper on the IR roles, the two predominant frameworks of the public relations roles are taken as references. The first one is the five-role typology of public relation by Broom and Smith (1979). They classified public relations practitioners into five types, including expert 23.

(31) prescriber, technical services provider, communication facilitator, problem solver, and acceptant legitimizer. Some features of these roles can also be found in IR’s tasks and functions. The other predominant framework of the public relations roles is the manager-technician dichotomy by Dozier (1984). This typology has been used widely in numerous role studies. The managerial perspective is usually connected with the idea of being a member of the dominant coalition in the organization as mentioned in the previous power relations section.. 政治大. The situation of IR has not been systematically studied unlike public relations.. 立. It is a necessary question to have a more thorough picture of IR’s roles before going. ‧ 國. 學. for further research on the profession. Thus, the following research question is asked:. ‧. RQ4: What are the roles Taiwanese IROs play in their organizations?. n. er. io. sit. y. Nat. al. Ch. engchi. 24. i n U. v.

(32) CHAPTER 3 METHODOLOGY. 3.1 In-depth Interview In-depth interview is used as the research method in the current study, which is a methodology often used in qualitative research. In-depth interview is helpful for exploring complicated and descriptive questions. By talking and interacting freely, researchers can have a deeper discussion on the topic and interviewees can better. 政治大 question. It also provides the opportunity to ask follow up questions. 立. explanation of their experiences, motivation, viewpoints and attitudes toward a certain. ‧ 國. 學. Since IR is an under-explored research topic in Taiwan, collecting direct information and viewpoints from experienced IROs helps understand how the. ‧. profession is actually practiced in Taiwanese industry and narrow the gap between the. n. al. er. io. sit. y. Nat. practice and the academy.. 3.1.1 Semi-structured interview. Ch. engchi. i n U. v. Structured, semi-structured, and unstructured interview are the three fundamental types of research interview. The questions, the ordering and the phrasing of the structured interview are unified. The process of the interview is highly controlled by interviewer. This is usually used for questionnaire survey on topics that had been highly developed. On the other hand, the unstructured interview has no specific guideline for interview process but has one topic for free discussion. The interview is highly flexible (Berger, 2014).. 25.

(33) Semi-structured interview is a mix of structured and unstructured interview. This “open-ended yet directed, shaped yet emergent, and paced yet unrestricted” (Charmaz, 2006, p. 28) approach makes sure that the interview answers questions of the research while at the same time flexible for further discussion on their own experiences and related topics. Since the current study aims to explore how IR is practiced, their roles and the issue of power relations in Taiwanese corporations, the interview has to correspond to research questions. Semi-structured interview is thus adopted in the. 政治大 the study and the literature 立 review, and all the interview questions are open-ended current study. The outline of the interview questions are based on the purpose of. ‧. ‧ 國. 學. to answer research questions.. 3.1.2 Interviewees. y. Nat. er. io. interviewees:. sit. To meet the needs of this study, there are few selection criteria for. al. n. v i n (1) Interviewees are experienced as an IR for years. Their C hIROs who have worked engchi U ranks or job titles are IR managers (or above).. (2) The industries of the interviewees are diverse instead of concentrating in the same industry. (3) The number of the interviewees depends on saturation of data. While, the minimum number set for the current research is ten so as to gather sufficient opinions from different interviewees. The current research includes thirteen interviewees from twelve publicly traded companies listed on Taiwan Stock Exchange. All of the interviewees would 26.

(34) like their identification to remain anonymous. The industry types of these companies include three companies from the computer and peripheral equipment industry, one from the optoelectronic industry, one from other electronic industry, one from electronic and mechanics industry, two from traditional industry, one from tourism industry, two from finance industry and one from the communication and Internet industry (also referred as telecommunication industry)3. This helps understand how IR is practiced differently or similarly in different industries and prevent bias results because of similar backgrounds as well.. 政治大 companies. The proportion 立of a company’s qualified foreign institutional investors. The interviewees are all from scaled and well-acknowledged publicly traded. ‧ 國. 學. (QFII) shareholders is usually considered one of the important index for IR’s performance measurement, and the QFII shareholder proportion (based on the data. ‧. on June 15th, 2016) of the interviewee’s companies are three with 1-20%, three. io. sit. y. Nat. with 21-30%, two with 31-50%, and four with more than 51% QFII holdings.. n. al. er. The interviewees are all very experienced in IR work. The average IR. i n U. v. service year of them is 12 years (maximum: 17 years; minimum: 5 years). Their. Ch. engchi. knowledge of the IR circle and IR work provides precious information of the occupation and the practice in Taiwan.. 3. The industry types is based on how these companies are categorized on Taiwan Stock Exchange. 27.

(35) Table 1. List of the Interviewees IR Seniority. Job Titles 治政 IR Manager (經理) Finance 大Vice President (副理) Senior Corporate Development Division 立. No.. Industries. Departments. 1 2. Traditional industry Finance. 3. Finance. 4 5 6 7 8 9 10 11 12. Peripheral equipment Electronic and mechanics Optoelectronics Telecommunication Other electronics Peripheral equipment Finance Traditional industry Tourism. Finance Corporate Governance Center Treasury Management Department Finance, Investor Relations Finance and Administration Center Investor and Public Relations Finance Finance Finance. 13. Peripheral equipment. Finance, IR Division. Deputy Manager (副理). n. y. sit. er. io. Ch. Director, IR/PR Deputy Director (副處長) Manager (經理) Senior Director (資深處長) Deputy Director (副處長) Senior Director, IR/PR (資深處長) Senior Associate Manager (資深協理) Manager (經理) CFO (財務長). ‧. Nat. al. 學. ‧ 國. Corporate Development Division. i n U. v. i e n g c hDirector (副處長). 28. Gender. (years). Female Female. 9 9. Female. /. Male Male Male Male Female Female Female Female Male. 16 14 10 12 16 13 13 9 20. Female. 5.

(36) 3.2 Interview Procedure Each interview took approximately 40 to 50 minutes. At the beginning of the interview, the interviewer explained to the IROs the purpose of the study and the process of the following interview to let the interviewees understand the theme and the basic structure of the interview. The researcher informed IROs that they can choose whether to reveal their identity or not to relieve their concern about answering sensitive questions related to their companies. All of the interviewees would like to keep their identity anonymous. The interviewer also asked for interviewees’ approval. 政治大 one by note-taking. Six of 立 the interviews were done face-to-face and the other half is of recording. Eleven of the interview were recorded with digital voice recorder and. ‧ 國. 學. done via telephone.. The order of the interview questions was basically in line with the interview. ‧. guide but was also flexible depends on the interview context. During the interview,. y. Nat. io. sit. the interviewer prevented to talk too much and let interviewees share their own. n. al. er. opinions freely. The interviews were recorded into transcripts for data analysis (Berger, 2014).. Ch. engchi. i n U. v. 3.3 Interview Questions The interview were divided into four parts: background information, opinions on the roles of IR, issue of power relations of IR practitioners in the corporation, and opinions on IR’s situation in current and future Taiwan industry. IR Insight’s annual global IR practice surveys by IR Magazine (IR Magazine, 2015) was one of the important references for developing this interview structure. Studies on public relations roles were also used as references for question design (Johansson & Larsson,. 29.

(37) 2015; Moss, Nesman & DeSanto, 2005). As a semi-structured interview, some unprepared questions were brought out during the interview. All the questions were open-ended and the interviewees were encouraged to talk about their own viewpoints freely.. 3.3.1 Investor relations practitioners in Taiwan Interviewees’ background information was asked at the very beginning of the. 政治大 These questions included 立 “What is your job title?”, “What’s your education. interview to have a brief overview on who usually serves in IR.. ‧ 國. 學. background?”, and “Please share your career experiences before and after becoming an IR.” (Laskin 2009; IR Magazine, 2015). ‧. There were also following-up questions such as “How do you think these. y. Nat. n. al. Ch. engchi. er. io. work?” to have a deeper discussion on the issue.. sit. experiences (education background and working experience) help you in your IR. i n U. v. 3.3.2 The roles of investor relations. Interviewees were asked questions related to their tasks and goals for IR. This is to clarify the roles of IR, how it is positioned and how it functions. For the first question “How do you define the profession?”, the interviewees were firstly asked to define IR freely. They were also asked which fields/ function they think IR belongs to and what goals and tasks they think to be most important for IR. “How IR is positioned in your company?” was to understand how 30.

(38) corporations put IR in corporate structure. Is it an independent department or does it belongs to a certain corporate function? Who do IR practitioners report to? What’s IR practitioners’ opinions toward this kind of arrangement? These are all questions that the current research wants to know how corporations position and perceive the importance of IR. This is also related to the issue of power relations. The relationship between IR and public relations is another topic included in this part. “How do you/ your team interact with public relations department/team in you company?” How IR cooperates with public relations and what are their. 政治大. thoughts about the same and the difference between IR and public relations were. 立. all asked here.. ‧ 國. 學. The next role topic that this research focuses on is communication function and relationship management strategy of IR when facing external and internal. ‧. audiences. “Who are your major external audiences?” and “How do you interact. y. Nat. sit. and communicate with them?” were asked to see IR practitioners’ interaction with. n. al. er. io. external audiences. Among all the external audiences, “How do you interact with. i n U. v. media?” was specifically asked to understand the relationships between IR. Ch. engchi. practitioners and media since media is a unique external audience different from the investment community. For interacting with internal audiences, “How do you interact with people from different department?” and “How does your company value the importance of IR’ internal communication function?” were the main questions. “What do you think to be the most important goal and function of IR?” and “What do you think to be the most difficult tasks of IR?” were the last two questions in this part of IR functions and roles.. 31.

(39) 3.3.3 “Having a seat at the table” The issue of power relations in IR practice is another important topic in this study. To have a look at the current situation in industry, interviewees were asked to share their own experiences regarding IR’s influence and how IR is valued in their companies and their opinions on the arrangement. Questions such as “How do you think about IR’s position in top managerial level and why?”, “What are the roles that IR play when top management team is making decisions?”, “How do your company value IRO’s opinions?”, “What would. 政治大. happen if IR brings up opposite opinions?” and “How do you interact with the top. 立. management (i.e. C-suites or BOD) when executing IR work?” were included. ‧ 國. 學. (Berger, 2006; Reber & Berger, 2006; Dolphin, 2004).. ‧. Also, interviewees were asked to share their opinions on the roles of IR. n. al. 3.3.4 Insights on IR practice in Taiwan industry. Ch. engchi. er. io. sit. y. Nat. when the company is making significant decisions.. i n U. v. At the final part of the whole interview, the interviewees were asked to share their opinions on IR’s development and environment in Taiwan industry. Guiding questions included “How do you think IR is valued in Taiwanese industry?” and “What do you expect about the future for IR in Taiwan?” This part was to understand some facts of IR practice in Taiwan. Interviewees were also asked to share their own opinions freely in the end of the whole interview.. 32.

(40) CHAPTER 4 RESULTS. Although interviewees are from different industries and different companies, they share same opinions on most topics. The interview results are sorted into the following sections according to interview questions and research questions.. 4.1 Backgrounds of Investor Relations Officers. 政治大 have an MBA degree. Only three of them majored in other non-financial related fields 立 All the interviewees graduated from college of commerce and many of them. in undergraduate education (English literature, psychology and tourism respectively).. ‧ 國. 學. This is similar to many survey results that IROs mostly have a financial related. ‧. educational background. This is closely related to the target audiences IROs face.. y. Nat. sit. n. al. er. io. “Since our clients are portfolio managers or analysts, finance is a common language. If you are not equipped with this language, you might have difficulty working as an IR.” (Interviewee No.11). Ch. engchi. i n U. v. In terms of working experiences, there is only one interviewee starting her career as an IR after graduating from school (Interviewee No.8). She was a finance planning specialists and at the same time responsible for IR tasks at that time. Most of the interviewees have other working experiences before becoming an IR. Their previous professions are often in financial related fields such as accounting, treasury, underwriting, securities analysts and etc. Only two interviewees have different work experiences before. Interviewee No.10 worked as a journalist before she became a securities analyst. She thought the training of journalist is helpful especially in terms of “information compilation, collection and analysis.” (Interviewee No.10) 33.

(41) Interviewee No.12, a CFO from the tourism industry, graduated from tourism school and worked as a hotel staff at the very beginning before he studied in financial school.. “I started from working as a waiter, a bartender and then became a housekeeping staff and a duty manager. Afterward, I went to Australia to study cost controlling courses and became cost control manager in Taipei Hilton Hotel.” (Interviewee No.12). IROs believed financial-related backgrounds are very helpful since financial knowledge is a must for IR work. Besides this, many IROs brought up the value of. 政治大. having knowledge of the industry the company is in.. 立. ‧. ‧ 國. 學. “What is more important is that you need to have sufficient understanding about the industry. You also need to have passion to learn and discover your products and techniques.” (Interviewee No.9) Interviewees. n. al. er. io. sit. y. Nat. with non-financial backgrounds confirmed the idea and said that these experiences are useful since they can have “a thorough understanding of this industry and its operation.” (Interviewee No.12). Ch. 4.2 Functions of Investor Relations. engchi. i n U. v. Communicating and delivering company’s information to audiences is the core of IR tasks. The process consists of information production, information dissemination, and information collection. IR practitioners accomplish all these three parts to make sure the quality of information they give and receive. To manage information delivery well, IR practitioners also work as researchers. They monitor the markets their companies are in and study future trend. This activity is known as “market intelligence.” Market intelligence is crucial for IR to communicate with the investment community as well as to provide useful information 34.

(42) to the management team.. 4.2.1 Information production Producing information is the base of information flow. Information production is important since it not only influences how the investment community views and evaluates the company’s current and future performance but also determines its corporate image. Financial information is the key topic that the investment community is. 政治大. interested in. IROs interact with finance department very often to receive latest. 立. financial data and then think about how to interpret these numbers. Some IROs. ‧ 國. 學. also cooperate with public relations teams to make sure they are on the same page. IR is like the “makeup artist of a corporation.”. ‧. sit. y. Nat. Non-financial information is another crucial part that IROs focus on.. io. er. Besides financial data, the investment community requires more non-financial information such as current operation situation, strategic plans and etc. Sometimes. al. n. v i n they also ask information thatCis not directly relatedUto profit-making topics such as hengchi the development history of the company, shareholder structure and the members of BOD. As a result, IROs need to have accesses to non-financial information including latest products, research and development, strategies and etc. They gather information from different parties and reproduce it to useful and understandable information to their audiences.. “Investors need more information than media. They want something more than news releases. Publicly traded companies have to serve 35.

(43) investors and they have to provide a window that has a database to respond to investors’ needs. They care more about strategies instead of numbers only.” (Interviewee No.10). In addition to talking about current situations, “you have to know how and what to talk about outlooks.” (Interviewee No.5) the outlooks should be compliant with securities regulations and give the investment community a proper expectation. With all the materials and corporate information, it is IRO’s responsibility to. 政治大 the investment community’s 立 trust toward the company. It should also meet the produce a story that is proper and help build up a positive corporate image to win. ‧ 國. 學. requirement of transparency and the principle of equality.. ‧. “Transparency is the simplest word to describe information disclosure. There is a line in the concept of transparency. Defining where the line should be is what IR should help the top management. Companies have the duty to remain transparent but it is usually misunderstood or misuse. We need to educate and communicate what is right. IR should follow the principle of honesty, fair, and transparent when delivering information and at the same time compliant with the law and the top management’s expectation.” (Interviewee No.2). n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. “Telecom industry has the strictest standard regarding transparency. […] Comparing to other industries, telecom is more stable. To attract investors’ interests to a stable company, you need to let them feel reassured by being transparent.” (Interviewee No.7). Though transparency is required, sometimes there are some confidential information that investors may ask but IROs are not allowed to reveal. Regarding this, IROs need to know how to differentiate what can be told and what cannot. 36.