ABSTRACT
Considering theory from communication and public relations establishes an enhanced capability to explain how corporations actually go about relating to their stakeholders. Theory provides a guide to content and the manner in which information is conveyed so there can be a level of confidence that it is having the impact, and achieving the value, intended. Since financial and investor communication relates not only to a corporation but also to the financial marketplace, there are a number of aspects of theory from a financial perspective that have relevance for the practice of communicating business and financial information. A considerable amount of theory has been developed around how companies are managed and implement strategy for growth in their markets. Since we are concerned with companies listed on stock exchanges, there is economic theory that gives financial markets a context and role in society. There are also aspects of theory about how financial markets react to information and the way in which investment portfolios are put together. These aspects of theory coalesce around a concept like “shareholder value”, which not only has implications for management and accounting but also the communication perspective of singling out a particular stakeholder group. Increasingly as corporations occupy a larger role in society, so their social role is an important consideration, which brings in other stakeholders such as employees and the wider environment, making them additional priorities in corporate communication. These issues highlight the value of understanding a link between the practice of financial and investor communication and theory from a communications and financial perspective. An interesting starting point for this is to look at how the listed corporation came into being, since this sets up considerations about who owns these corporations, the separation over time of the concepts of ownership and management and the way management thinking has evolved to give communication a critical role in the execution of strategy.
