Integrated Financial Communication

Prof. Dr. Christian Hoffmann

The latest study "Integrated Financial Communication" of the Center for Research in Financial Communication deals with the cooperation and coordination between investor relations (IR) and corporate communications with regards to financial communication. The study focuses on how closely and through which instruments the coordination is implemented as well as the importance of shared goals. It provides further insights into what both functions know about each other, where conflicts arise, and how they can be resolved. Experts in Investor Relations and Financial Communications (on the Corporate Communications side) of the largest listed companies in Germany, Austria and Switzerland were surveyed.

The results show that coordination between the two functions is close, but mostly informal and event-driven. A quarter of the respondents stated that they coordinate their activities with the other department on a daily basis. Channels of choice are, above all, conversations, telephone calls and mail. There is a clear division of tasks with regard to the target groups: corporate communications focuses on journalists, while IR focuses in investors and analysts. While reporting tasks tend to be more IR-related, special situations and strategic tasks require intensive cooperation between the two departments.

Overall, the operational integration is more pronounced than the strategic integration: about half of the companies surveyed renounce to coordinate strategically. Consequently, there are often no consistent goals in place for both functions; however, 30% of the respondents stated that goals are at least "fairly strongly" aligned. Evaluation is mostly a one-way street: it takes place much more frequently in corporate communications than in investor relations. An open question remains: what is the respective understanding of "evaluation"?

Despite their commonalities, investor relations and corporate communication have slightly different priorities, which can lead to cultural friction. While corporate communications tends to place stories, a conservative, consistent communication is more important to IR - overall, the relationship is nevertheless harmonious. The "different DNA" is partly due to different disciplinary backgrounds.

The study results show that greater integration pays off. However, there is no partial integration: strategic orientation, formalization and frequency of coordination belong together. A stronger integration also increases the satisfaction and the working atmosphere. It leads to a wider set of coordination tools, more consistent goals and more coordination in the evaluation.

The full study will is available here (German only).