2 - Investor relations: Professionals and institutions

Abstract

This chapter discusses investor relations. The dramatic increase in recent years in both the United Kingdom and the United States of the unsolicited bid has led companies increasingly to question their relations with their shareholders. In contrast to common attitudes in continental Europe, the United Kingdom and the United States adopt the position that company boards are almost exclusively responsible to shareholders. But in practice, particularly in Britain, this relationship has been weakened by the great size of many companies and the institutional ownership of the bulk of their shares. The central purpose of investor relations is to communicate to the market up-to-date information relevant to the valuation of a company's shares by existing and potential investors, their advisers, and those who influence them. The mass marketed flotations have demonstrated the realization that selling the abstract notion of equity investment does not work. People are more likely to buy a part of something they are familiar with and confident about. Shareholder relations is but a part of a company's communication activities. From a corporate point of view, everything a company does and says should be consistent throughout.