Investor Relations

Investing for the Future

Investors are the owners of any public company. It is extremely important for an organization to keep a transparent line of communication open with their stakeholders. Through the years, a list of investor relations objectives have been defined. Companies must strive to explain their vision and strategy, ensure the expectations of the company's stock and work to reduce stock price volatility. All of these in concert will help the company to continually and consistently compete for capital.

There are two types of investors. Institutional investors hold large chunks of stock and trade actively while individual investors use company stock to benefit their own short and long term financial goals. Investors of all kinds learn about various options through intermediaries. Three types of such intermediaries are the media, which covers businesses and effect their stock, sell-side analysts who work either with financial firms or buy-side analysts who provide stock analysis to financial firms and ratings agencies, which determine "creditworthiness" of specified organizations.

It is important for organizations to create an investor relations program. Investor relations can work from inside an organization or from an outsourced agency. These programs are decided upon based on the size of a firm and its objectives for investor relations. Many companies in today's business climate have investor relations pages on their corporate websites. As we learned through the in-class assignment, all potential avenues of investor interest, from financial reports to investor contacts are available to help fully define the organization's objectives.

How I See it

After reading a glowing recommendation in Kiplinger magazine, I recently purchased my first stock. While my investment was not much, I was very impressed with the company's communication. From the outside looking in (as a non-investor), I sometimes forgot that shareholders of a company are the owners of the organization. After buying in, my inbox is periodically pinged with company updates, invites to shareholder seminars and long-term strategies. It is a welcome bit of personal confidence in an otherwise anonymous world that a company goes lengths to update even its smallest shareholders on the company's goals.

A friend of mine is an aforementioned buy-side analyst. While his knowledge of finance far exceeds my competence, it is interesting to speak with him about investing, especially in this time of financial crisis. He often tells stories of his meetings with clients and their personal concerns in regards to their investments. And, at the same time, I like hearing about the stocks I should "definitely" buy or ones I should "avoid at all costs," even though I do not have an extra cent to budget towards investing. Maybe one day, right?

Links

This link discusses the impending lawsuits that will be filed against Lehman Brothers for disseminating false information before the company's collapse. While the result will likely bring more shame to the Lehman name, times like these show the importance of an IR department.

The following video features Ken Brause, executive VP of investor relations of his company, CIT, discussing CIT's strategy of using new media such as podcasts to communicate with investors:

Intercultural Communication

Differing Values

In today's high-tech, global marketplace, forming business relationships is not relegated domestically. Organizations partner and do business with others from all across the globe. Now, more than ever, business people must be sure to pay close attention and adhere to cultural values of those not next door, down the street or across state, but throughout the world.

The intercultural project gave me great insight as to the differences between an American and a Frenchman. Dining habits, risk aversion and attitudes during meetings are all vastly different between the two cultures. As a young professional, this research and knowledge prepares me for a future that will no doubt present situations where I come in contact with those from another culture.

The CCAI assignment detailed exactly how prepared I currently am to face the challenges of doing business across culture. While my ER, FO, PAC and PA scores were better than I would have imagined, I realize there is always room to improve. For instance, my Personal Autonomy score could use some attention, but there is a sense of hesitation, because to focus solely on one trait would be to undermine the goal of increasing my effectiveness across all levels.

Intercultural Experience

"Are you married?" I asked Christian. He gave me a dumb look and said yes while flashing his jewelry-adorned right ring finger. "Oh, so in Germany you wear wedding rings on the right hand?" I said. "That's correct." Sure, I felt stupid. Fortunately, this interaction took place with a coworker of mine during an internship and not with a potential client across seas. While my mistake is likely common, the bit of embarrassment I felt taught me to always be observant and sensitive to the culture of others. Since that day, any time I meet someone from another culture, I am cautious to not ask the dumb question that could potentially have negative consequences on our relationship.

I traveled to my company's branch location in Los Angeles, California approximately six months ago. As expected, there were many employees at this location of Hispanic descent. Granted, the majority of them spoke fluent English, but to help form a relationship with people I rarely see in person I used the knowledge gained from my eight years in Spanish class. Despite being quite rusty, they were much appreciative of my attempts and to this day, whether on the phone or via e-mail, much of our correspondence is done in (albeit broken) Spanish. Our relationships have grown with each talk and we are in the position to be effective coworkers for some time.

Real Examples

The following link combines various aspects of our semester's topics. It has been reported that within minutes of last week's terrorist attacks in India, users of Twitter and Flickr were updating their sites with up to the minute information. This is an example that while there are countless differences between cultures and how to communicate across them, there are too some similarities.

As of this summer, there weren't many brands as American as Budweiser. Americans were stunned to hear that Anheuser-Busch was purchased by the foreign InBev. InBev's acquisition goes to show that no matter how seated you might be in a particular culture, there is always a possibility that you might be required to do business with an organization of a new culture and different values.