Communication strategies used by investor relations practitioners to build and maintain relationships with investor stakeholders
Investor Relations (IR) has become a key area of focus in academic and professional debates over the last few decades. Although the identity of the field is contested, with both finance and communication disciplines claiming the fledgling field, there is consensus across disciplines that communication is paramount in IR success. However, a number of scholars (see Schutzmann, 2013; Laskin, 2011; Watson, 2008) argue that IR is not being fully utilised to maximise fair valuation and obtain favourable return on company investments due to lack of strategic communication expertise among IR practitioners who usually have a purely financial background. It is against this background that this study evaluated communication strategies employed by IR practitioners in South Africa to build and maintain relationships with investor stakeholders. The purpose is to contribute towards theoretical debates on strategic communication practice in IR, an area that remains under theorised and understudied, especially within a developing country context. The theoretical frame of the study was derived from public relations Excellence theory and the two-way symmetrical communication (Grunig and Hunt, 1984). The research methodology of the study was qualitative and employed an explorative design to gather data through a combination of document analysis, indepth interviews and content analysis. The findings show that financial and non-financial information is disseminated to investor stakeholders. However, the communication of financial information by IR professionals to investor stakeholders remains dominant in South Africa. Importantly, two-way symmetrical communication and two-way asymmetrical communication strategies are used in different ways to build and maintain relationships and to disclose mandatory key corporate information to investor stakeholders. One-on-one meetings in different formats and online dialogue with closed feedback emerged as the dominant key two-way symmetrical communication strategies of nurturing and sustaining relationships with investor stakeholders. This includes two-way asymmetrical communication strategies such as the corporate publications and IR websites. IR policies that promote two-way symmetrical communication, trust, honest, transparency and credibility emerged in the study as being implemented by IR professionals of South Africa. In addition, the findings show that such characterised IR policies advances the rules of investor stakeholder relationship building and engagement. However, it remains unclear from a South African standpoint whether IR professionals are ready to engage in an open dialogue with investor stakeholders using social media. The findings show that IR in South Africa has trascended into a synergy era where two-way symmetrical communication is emphasised. It further shows that the theoretical frame of the study as derived from public relations Excellence theory and the two-way symmetrical communication (Grunig and Hunt, 1984) has positive implications in the investor relations efforts of building relationships and information disclosure. However, investor stakeholder preferences of engaging with IR professionals require further exploration. This will assist in theorising communication strategies ideal for IR practice.