Abstract
The purpose of this study was to develop a measurement instrument to measure the quality of Internet investor relations (IIR). This study will aid future research to examine IIR and provide guidance to companies in the development of an IIRstrategy. The development of the instrument was based on best practice guidelines issued by the Investor Relations Society, an extensive literature review and a pilot study. The result was a measurement instrument that consists of 346 attributes.Quality is assessed by measuring content as widely as possible, by including attributes to measure the accessibility, navigation and timeliness of information, and by allowing for the measurement of attributes as being partially availablebased on breadth, usability and timeliness considerations. The reliability and validity of the measurement instrument was confirmed on the basis of the measurement results of a sample of 85 JSE-listed companies.
Highlights
King III (2009) states that transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence
Granting that usability is extremely important, the current study argues that a valid measurement of investor relations should include attributes such as relevant news, investment case, bondholder information, corporate governance and corporate responsibility
The purpose of this study was to develop a measurement instrument to measure the quality of IIR
Summary
King III (2009) states that transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence. Stakeholders include, but are not limited to, shareholders, suppliers, employees and creditors. Marston (1996: 477) defined investor relations as the link between a company and the financial community in terms of which information is provided to the financial community for evaluating the company. The activity of investor relations involves all information types, for example mandatory and voluntary, financial and non-financial, as well as shareholder services to facilitate relationship management and/or strategic marketing. Economic theory links increased liquidity to the cost of capital through information asymmetry (Botosan, 2000)
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