Shareholder investor relations

As a further consequence of an advanced shareholder value orientation, a more targeted approach can be taken to investor relations. We feel that investor relations in many chemical companies today is predominantly aimed at providing timely, accurate, and exhaustive information to capital markets. Again, the assumption is that capital markets are perfectly efficient and will always evaluate this information correctly again, this does not match up with the real world. Behind the capital markets are investors with a wide variety of expectations and important specific investment preferences and institutional restrictions. In addition, it can be demonstrated that only a small number of investors with significant trading volume mainly influence stock prices in the short and medium term (Coyne, K. P. and Witter, J. W.). 

Good communication with the investment community is essential for a company that wishes to increase its market value. Our analysis of a sample of German companies found a significant correlation between the quality of investor relations (judged by the quahty of annual reports, analyst conferences and other investor events) and shareholder returns. The sample covered a broad spread of industries and included several chemical companies. 

This chapter defines the term bondholder value and contrasts it with shareholder value. In a second step, the different viewpoints of shareholders and bondholders are examined respectively. The discussion of both parties conflicts of interests concentrates on capital structure, share buybacks, dividend policy, and corporate strategy. As there are also similarities between shareholders and bondholders, instruments of the shareholder value concept that can be used to create bondholder value are described. That includes investor relations, risk management and the balanced scorecard. 

Instruments for implementing shareholder value concepts are investor relations, risk management and the balanced scorecard. These three... 

The company s success not only has to be achieved, but has to be communicated to investors to have an impact on the company s securities prices. Communication is the central task of investor relations (IR). Many companies are aware of its significance and set up IR departments. Essential is the timely, regular, and transparent presentation of the company which is of interest to shareholders and bondholders Market participants have to understand how the company works. And the company should know about investors interests. 

In the long run the aims of shareholders and bondholders are largely congruent. This is punctuated by the fact that instruments of shareholder value (investor relations, risk management, and balanced score-card) can be nsed to enhance bondholder value. Thus it does not make sense to pursne short-term maximization of the stock price at the expense of the company s creditors. 

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