The role of the corporate purpose and how investor relations officers make sense of it

Abstract

This article addresses the role of the corporate purpose in strategic financial communication from the perspective of investor relations officers (IROs) with particular reference to their sensemaking process. Strategic financial communication increasingly includes intangible assets that contribute to the value of the company. At the same time, more and more companies are publishing corporate purpose statements that are intended to express their relevance. The article acknowledges those trends and aims to assess how IROs make sense of the corporate purpose and how they strategically use it in investor relations communication. Eleven qualitative in-depth interviews with IROs from German DAX40 companies were conducted and analyzed with an abductive method. The results show that IROs focus on cues when making sense of the corporate purpose, especially links to intangible assets and organizational values can be identified. The corporate purpose is only partially used in communication with the financial public. Deepened reflection on the corporate purpose, fueled by discussions and cues, supports the sensemaking process of IROs which can be guided by the organization. The role of the corporate purpose turned out to be complex with – although not always explored – the potential to be used as a descriptive and normative tool in strategic financial communication.