Diss. Univ. St. Gallen, 2004.

<p>Investor Relations is a function used by companies to compete for capital by creating relations with investors. It is a young function, earlier practiced by the same people who had responsible for exercising the Public Relations.</p><p>Investor Relations has evolved a great deal lately but there are still no concrete theories behind the function. The aim though is clear and there are literature explaining how to practice the different parts. The most research within Investor Relations uses the theory of Relationship Marketing. Lately the two authors Hägg and Preiholt have started to examine what they call Financial Marketing since Investor Relations is about relations between actors on financial markets primarily.</p><p>In this paper, we examine the aspect of information in Investor Relations. Communication is very important for good results. Therefore it is essential that the information given to the different stakeholders is understood by everyone.</p><p>The first questions is whether the information is really distributed to everyone. For this there are several legal restrictions who make sure that, at least the companies noted on the stock market, release information that can affect the stock price in a manner that is considered reaching all the stakeholders at the same time.</p><p>The second question is whether the level of the information is low enough for everyone interested to understand. There is a tendency to insert a text box in the annual reports where some words and concepts are explained. The companies bring more complex notions into discussion when the information regarded is communicated only with more professional agents, like analytics for example.</p><p>The third question treated in this paper regards how willing the noted companies are to share information beyond what is required by the legal restrictions. More than half of the content of the annual report consists of additional information. The companies are generally very open to the public and do not mind sharing information. Among the factors that stand in the way of this are first of all the question of resources, primarily financial ones. The second factor is the increasing legal restrictions. To make sure all of restrictions are being followed correct, both the resources and the creativity have to take the downside.</p><p>There is also a matter of deciding what more information needs to be communicated and shared. The companies might feel that the regulations cover about everything and no more additional information is necessary. It is up to the management of any company to decide what information to communicate, how and when. Generally it is considered that the information is being well distributed to everyone interested. The problem is that not every single shareholder is really interested.</p><p>In the financial market, the information is available for everyone and free to acquire. By only a phone call one can ask the CEO anything regarding the company. The primarily difference between those who are in possession of more information than others is as simple as that they spend much more time on collecting and analyzing information. In combination with their past experiences and their professional knowledge they get an advantage.</p>

違規給企業帶來的主要後果是企業名譽的損失。然而，我們對以下問題卻知之甚少：企業在違規事件中是怎樣損失名譽的？為什麼同樣程度的違規給不同企業帶來的名譽損失卻不同？等等。本文綜合了來自犯罪學、財務學和社會心理學方面的文獻，把企業名譽定義為利益相關者對企業的情感，同時把違規事件看成是導致這種情感變化的誘因。 / 本文構建了一個綜合的理論模型，研究企業股東和企業自身的情感和情感變化。首先，本文提出，企業違規違反了股東對企業的道德期望和基本情感，使股東的情感發生偏移，並最終導致企業名譽的損失。在情感偏移的形成過程中，股東傾向于根據違規線索的診斷性特徵，把他們的基本情感用作透視鏡或者參照點來評價違規企業。第二，本文認為，違規企業通過在致歉公告中列出恢復性行動或語言，可以恢復股東對企業的基本情感並且減少企業名譽的損失。然而在情感恢復過程中，股東傾向于將恢復性行動或語言的心理距離與違規線索的心理距離進行比較，並據此調整他們對企業的評價和情感。第三，與其他違規企業相比，那些表達了愧疚感的違規企業在未來會約束自己的行為，降低了反復違規的傾向。但是隨著本次懲罰強度的不同，以及企業直接或間接地被懲罰經歷的不同，違規企業對本次懲罰的目的和道德意義的評價也會不同，並由此影響企業表達愧疚感的傾向。 / 本文的貢獻主要集中在以下四個方面。首先，通過強調情感在企業和股東關係中的重要性，豐富了關於公司治理的研究。第二，本文從情感視角去探討存在于股東和企業在資訊評價中各種的偏見，而這些偏見會影響他們對違規事件的情感和行為反應，以此拓展了集中於經濟視角的企業違規研究。第三，本文通過借鑒解釋層次理論中的觀點來研究企業恢復性行動和語言的特徵以及他們在股東情感恢復和企業榮譽恢復過程中的作用，這豐富了關於企業層的影像管理和危機管理研究。第四，本文通過強調企業內化懲罰在約束企業違規行為方面的作用，這對補充了關於懲罰的研究，並具有現實意義。 / A consequence of corporate fraud studied in the literature is reputational penalty on the fraud firm. However, little is known about how a fraud firm loses its reputation after the fraud incident and why firms receive different levels of reputational penalty given the same level of fraud severity. Integrating literatures from criminology, finance, and social psychology, this dissertation conceptualizes firm reputation as stakeholders’ (mainly shareholders here) sentiment toward the firm and a fraud incident as a trigger of shareholders’ sentiment changes. / In this dissertation, I develop an integrated model that examines the sentiment changes of shareholders and sentiment restoration efforts made by the fraud firms. In the first study, I propose that corporate fraud violates shareholders’ normative expectations and fundamental sentiments toward the fraud firm, which leads to shareholders’ sentiment deflection and subsequently propels them to implement behavioral penalty on the fraud firm, that is, reputational penalty. During the process of sentiment deflection, shareholders tend to use the fundamental sentiment that they have adapted to as reference points to evaluate the fraud firm, depending on the salience of the fraud incident and the salience of the fraud firm. In the second study, I argue that the fraud firm can restore shareholders’ sentiment and minimize its reputation loss by expressing restorative actions in public apology announcement. However, during the process of sentiment restoration, shareholders tend to adjust their evaluation of the firm based on the relative psychological distance of the restorative actions compared with that of the fraud cues and sentiment cues. The third study focuses on guilt sentiments of the fraud firm, which have been found to have long-term impact on the fraud firm by transforming their future behaviors. I propose that fraud firms that express guilt sentiments after fraud punishment are more likely to restrain from repeated fraudulent behaviors in the future. However, variations in punishment intensity, together with the fraud firms’ direct and indirect punishment experiences, will influence their tendency to express guilt sentiments. / This dissertation aims to offer several contributions. First, by underscoring the importance of sentiment in the firm-shareholder relationship, it contributes to the corporate governance literature that mainly uses cognitive frameworks in the analysis. Second, it takes a sentiment approach to explore various biases embedded in shareholders’ and the firm’s evaluation of the informational cues that could influence their sentimental and behavioral reactions to the fraud incident, thus extending the corporate fraud literature that predominantly focuses on economics perspectives. Third, by examining the characteristics of firms’ restorative actions and languages and their effects on shareholders’ sentiment restoration and firm reputational repair, this dissertation contributes to the literatures of corporate turnaround and organizational-level impression management. Finally, it also contributes to the punishment literature by highlighting the internal transformation of the fraud firms, thus providing implications to stock exchange regulator and policy-makers in emerging economies. / Detailed summary in vernacular field only. / Detailed summary in vernacular field only. / Detailed summary in vernacular field only. / Xu, Yuehua. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2012. / Includes bibliographical references (leaves 117-137). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstract also in Chinese. / ABSTRACT --- p.I / CHINESE ABSTRACT --- p.III / ACKNOWLEDGEMENTS --- p.V / LIST OF TABLES --- p.IX / LIST OF FIGURES --- p.X / Chapter CHAPTER 1 --- INTRODUCTION --- p.1 / Chapter 1.1 --- Motivation and Research Questions --- p.1 / Chapter 1.2 --- Theoretical Framework and Premise --- p.4 / Chapter 1.3 --- Contributions --- p.9 / Chapter 1.4 --- Organization of the Dissertation --- p.11 / Chapter CHAPTER 2 --- STUDY ONE: A SENTIMENT MODEL OF FIRM REPUTATIONAL PENALTY FOLLOWING CORPORATE FRAUD --- p.13 / Chapter 2.1 --- Introduction --- p.13 / Chapter 2.2 --- Theoretical Background --- p.15 / Chapter 2.2.1 --- Corporate Fraud and Reputational Penalty --- p.15 / Chapter 2.2.2 --- Sentiment --- p.19 / Chapter 2.3 --- Theoretical Framework and Hypotheses --- p.21 / Chapter 2.3.1 --- Re-conceptualization of Firm Reputation and Theoretical Framework --- p.21 / Chapter 2.3.2 --- Stimuli - Sentimental Reaction - Behavior: The Process from Fraud Detection to Reputational Penalty --- p.26 / Chapter 2.3.3 --- Adaptive Levels of Moral Sentiment and Sentiment Rigidity --- p.28 / Chapter 2.3.4 --- The Moderating Effects of Cue Diagnosticity and Firm Visibility --- p.30 / Chapter 2.4 --- Methods --- p.34 / Chapter 2.4.1 --- Empirical Setting --- p.34 / Chapter 2.4.2 --- Sample and Data Collection --- p.35 / Chapter 2.4.3 --- Measurement --- p.37 / Chapter 2.5 --- Results --- p.45 / Chapter 2.6 --- Discussion --- p.56 / Chapter CHAPTER 3 --- STUDY TWO: FIRM RESTORATIVE EFFORTS AND REPUTATIONAL REPAIR AFTER CORPORATE FRAUD --- p.59 / Chapter 3.1 --- Introduction --- p.59 / Chapter 3.2 --- Theoretical Background --- p.61 / Chapter 3.2.1 --- Firm Efforts to Turn Around from Fraud Incidents --- p.61 / Chapter 3.2.2 --- Apology --- p.63 / Chapter 3.3 --- Theoretical Framework and Hypotheses --- p.65 / Chapter 3.3.1 --- Sentiment Restoration and Pragmatic Attitudes toward Restorative Efforts --- p.65 / Chapter 3.3.2 --- The Construal Level of Restorative Cues --- p.68 / Chapter 3.3.3 --- The Distance of Problem Cues: The Delay of Punishment --- p.70 / Chapter 3.3.4 --- Shareholders’ Negative Sentimental Reaction: Media Negative Comments --- p.72 / Chapter 3.4 --- Methods --- p.74 / Chapter 3.4.1 --- Sample and Data Collection --- p.74 / Chapter 3.4.2 --- Measurement --- p.75 / Chapter 3.5 --- Results --- p.79 / Chapter 3.6 --- Discussion --- p.84 / Chapter CHAPTER 4 --- STUDY THREE: THE EFFECTS OF PUNISHMENT ON FRAUD FIRMS’ GUILT SENTIMENT EXPRESSION --- p.86 / Chapter 4.1 --- Introduction --- p.86 / Chapter 4.2 --- Theoretical Background: Punishment --- p.88 / Chapter 4.3 --- Theoretical Framework and Hypotheses --- p.90 / Chapter 4.3.1 --- The Expression of Guilt Sentiment and Repeated Fraud --- p.91 / Chapter 4.3.2 --- Punishment Intensity and Guilt Sentiment --- p.93 / Chapter 4.3.3 --- Normalization: The Moderating Effects of Direct and Indirect Punishment Experience --- p.95 / Chapter 4.4 --- Methods --- p.98 / Chapter 4.4.1 --- Sample and Data Collection --- p.98 / Chapter 4.4.2 --- Measurement --- p.99 / Chapter 4.5 --- Results --- p.102 / Chapter 4.6 --- Discussion --- p.110 / Chapter CHAPTER 5 --- DISCUSSION AND CONCLUSION --- p.111 / Chapter 5.1 --- Conclusion --- p.111 / Chapter 5.2 --- Contributions to Theory and Practice --- p.112 / Chapter 5.3 --- Limitations and Implications for Future Research --- p.115 / REFERENCES --- p.117

Some commentators attribute the success of certain hedge fund activism events to “wolf pack” activism, the support offered by other investors, many of whom are thought to accumulate stakes in the target firms before the activists’ campaigns are publicly disclosed. This paper investigates wolf-pack activism by considering the following questions: Is there any evidence of wolf-pack formation? Is the wolf pack formed intentionally (by the lead activist) or does it result from independent activity by other investors? Does the presence of a wolf pack improve the activist’s ability to achieve its stated objectives? First, I find that investors other than the lead activist do in fact accumulate significant share-holdings before public disclosure of activists’ campaigns, a result consistent with wolf-pack formation. Second, these share accumulations are more likely to be mustered by the lead activist rather than occurring spontaneously. Notably, for example, the other investors are more likely to be those who had a prior trading relationship with the lead activist. Third, the presence of a wolf pack is associated with a greater likelihood that the activist will achieve its stated objectives (e.g., will obtain board seats) and higher future stock returns over the duration of the campaign.

Introduction: When the American investment bank Morgan Stanley suddenly decide to increase their target stock price of the Ericsson stock by 100 percent, it became the point of origin for our interest in investor relations. In this particular case the increase of target stock price was announced right after new Morgan Stanley analysts started covering the stock. Why this tremendous increase in target stock price, we will probably never know. Perhaps the new analysts perceived the information disclosed from Ericsson’s investor re-lations function different from the prior analyst, and ended up in adjusting the target stock price. Problem: Stock prices today are very dependent on the market expectations of future company growth. Market actors estimate the potential growth by analysing information disclosed by the company. It has therefore become increasingly important for companies to manage their investor relations with a strategic marketing perspective to be able to meet the internal and external needs. Companies must also present themselves to investors in a way that appeals both on a rational and an emotional level. Once new investors are attracted and old ones are kept, companies must constantly communicate about their performance to uphold investors trust and there by creating or maintain long-term relationships. Purpose: The purpose is to explore if and how a marketing perspective is applicable when managing investor relations in traded companies. Method: This study has been conducted with qualitative research method. Collection of empirical data has been done through six semi-structured interviews with directors and managers whom all work with investor relations for their respective company. The six par-ticipating companies are all traded on the Stockholm stock exchange. The collected data were first analysed with the Kotler, Kartajaya &amp; Young (2004) model and secondly ana-lyzed from a relationship marketing point of view. Analysis: The analysis shows that our sample of companies subconsciously work in align-ment with the Kotler et al. (2004) model and that they also work with different types of re-lationship marketing. Together this provides a holistic image of how traded companies work with a marketing perspective in their investor relations. Conclusion: After having analysed our empirical findings it is our belief that a marketing perspective is applicable when managing investor relations.

Investor Relations is a function used by companies to compete for capital by creating relations with investors. It is a young function, earlier practiced by the same people who had responsible for exercising the Public Relations. Investor Relations has evolved a great deal lately but there are still no concrete theories behind the function. The aim though is clear and there are literature explaining how to practice the different parts. The most research within Investor Relations uses the theory of Relationship Marketing. Lately the two authors Hägg and Preiholt have started to examine what they call Financial Marketing since Investor Relations is about relations between actors on financial markets primarily. In this paper, we examine the aspect of information in Investor Relations. Communication is very important for good results. Therefore it is essential that the information given to the different stakeholders is understood by everyone. The first questions is whether the information is really distributed to everyone. For this there are several legal restrictions who make sure that, at least the companies noted on the stock market, release information that can affect the stock price in a manner that is considered reaching all the stakeholders at the same time. The second question is whether the level of the information is low enough for everyone interested to understand. There is a tendency to insert a text box in the annual reports where some words and concepts are explained. The companies bring more complex notions into discussion when the information regarded is communicated only with more professional agents, like analytics for example. The third question treated in this paper regards how willing the noted companies are to share information beyond what is required by the legal restrictions. More than half of the content of the annual report consists of additional information. The companies are generally very open to the public and do not mind sharing information. Among the factors that stand in the way of this are first of all the question of resources, primarily financial ones. The second factor is the increasing legal restrictions. To make sure all of restrictions are being followed correct, both the resources and the creativity have to take the downside. There is also a matter of deciding what more information needs to be communicated and shared. The companies might feel that the regulations cover about everything and no more additional information is necessary. It is up to the management of any company to decide what information to communicate, how and when. Generally it is considered that the information is being well distributed to everyone interested. The problem is that not every single shareholder is really interested. In the financial market, the information is available for everyone and free to acquire. By only a phone call one can ask the CEO anything regarding the company. The primarily difference between those who are in possession of more information than others is as simple as that they spend much more time on collecting and analyzing information. In combination with their past experiences and their professional knowledge they get an advantage.

<p>Problem: In the world of today’s business, there is a trend for investors not only to base their decisions whether to invest in a company on the basis of its financial results. These days more features are taken into consideration. Corporate identity is a crucial aspect to bear in mind for investors, as it demonstrates what the company is, how it works and where it is going. Corporate Communication is a process that allows companies to share their information with the stakeholders. Not every company is aware of the significance of communicating its corporate identity to investors. These represent a basis for the company, since their support is needed to achieve the organization’s objectives. Furthermore, communication of corporate identity to investors represents an opportunity for a company to achieve its goals. The importance and relation of corporate identity and communication to investors is becoming a relevant issue not only for them but also for stakeholders.</p><p>Purpose: The purpose of this thesis is to investigate corporate identity and its communication, as a key component, to investors.</p><p>Method: The authors have conducted a case study of the Chemical and Mining Company of Chile Inc. (SQM). A qualitative method approach has been used to achieve the purpose. Self-administered questionnaires have been used to gather empirical data.</p><p>Conclusion: The case study has led to conclusions on how important it is for SQM to communicate its corporate identity to investors. SQM’s corporate identity is seen as an instrument to differentiate, compete and communicate with investors. SQM’s visual identity is an instrument to communicate the evolution of the company. The company is using behavior, symbolism and communication as the main channels to transmit its corporate identity to investors. SQM’s investor relations show a clear awareness of the need for communication with its investors and financial stakeholders. This is supported by the development of their website and the information collected through the questionnaire. Finally, the authors conclude that corporate identity and its communication, as a key component, is essential for SQM. Its investor relations department and website show that it is very important for the company to communicate to investors its identity.</p>

<p>Problem: In the world of today’s business, there is a trend for investors not only to base their decisions whether to invest in a company on the basis of its financial results.</p><p>These days more features are taken into consideration. Corporate identity is a crucial aspect to bear in mind for investors, as it demonstrates what the company is, how it works and where it is going. Corporate Communication is a process that allows companies to share their information with the stakeholders. Not every company is aware</p><p>of the significance of communicating its corporate identity to investors. These represent a basis for the company, since their support is needed to achieve the organization’s objectives. Furthermore, communication of corporate identity to investors represents an opportunity for a company to achieve its goals. The importance and relation of corporate identity and communication to investors is becoming a relevant issue not only for them but also for stakeholders.</p>

<p>Introduction: When the American investment bank Morgan Stanley suddenly decide to increase their target stock price of the Ericsson stock by 100 percent, it became the point of origin for our interest in investor relations. In this particular case the increase of target stock price was announced right after new Morgan Stanley analysts started covering the stock. Why this tremendous increase in target stock price, we will probably never know. Perhaps the new analysts perceived the information disclosed from Ericsson’s investor re-lations function different from the prior analyst, and ended up in adjusting the target stock price.</p><p>Problem: Stock prices today are very dependent on the market expectations of future company growth. Market actors estimate the potential growth by analysing information disclosed by the company. It has therefore become increasingly important for companies to manage their investor relations with a strategic marketing perspective to be able to meet the internal and external needs. Companies must also present themselves to investors in a way that appeals both on a rational and an emotional level. Once new investors are attracted and old ones are kept, companies must constantly communicate about their performance to uphold investors trust and there by creating or maintain long-term relationships.</p><p>Purpose: The purpose is to explore if and how a marketing perspective is applicable when managing investor relations in traded companies.</p><p>Method: This study has been conducted with qualitative research method. Collection of empirical data has been done through six semi-structured interviews with directors and managers whom all work with investor relations for their respective company. The six par-ticipating companies are all traded on the Stockholm stock exchange. The collected data were first analysed with the Kotler, Kartajaya & Young (2004) model and secondly ana-lyzed from a relationship marketing point of view.</p><p>Analysis: The analysis shows that our sample of companies subconsciously work in align-ment with the Kotler et al. (2004) model and that they also work with different types of re-lationship marketing. Together this provides a holistic image of how traded companies work with a marketing perspective in their investor relations.</p><p>Conclusion: After having analysed our empirical findings it is our belief that a marketing perspective is applicable when managing investor relations.</p>

Problem: In the world of today’s business, there is a trend for investors not only to base their decisions whether to invest in a company on the basis of its financial results. These days more features are taken into consideration. Corporate identity is a crucial aspect to bear in mind for investors, as it demonstrates what the company is, how it works and where it is going. Corporate Communication is a process that allows companies to share their information with the stakeholders. Not every company is aware of the significance of communicating its corporate identity to investors. These represent a basis for the company, since their support is needed to achieve the organization’s objectives. Furthermore, communication of corporate identity to investors represents an opportunity for a company to achieve its goals. The importance and relation of corporate identity and communication to investors is becoming a relevant issue not only for them but also for stakeholders. Purpose: The purpose of this thesis is to investigate corporate identity and its communication, as a key component, to investors. Method: The authors have conducted a case study of the Chemical and Mining Company of Chile Inc. (SQM). A qualitative method approach has been used to achieve the purpose. Self-administered questionnaires have been used to gather empirical data. Conclusion: The case study has led to conclusions on how important it is for SQM to communicate its corporate identity to investors. SQM’s corporate identity is seen as an instrument to differentiate, compete and communicate with investors. SQM’s visual identity is an instrument to communicate the evolution of the company. The company is using behavior, symbolism and communication as the main channels to transmit its corporate identity to investors. SQM’s investor relations show a clear awareness of the need for communication with its investors and financial stakeholders. This is supported by the development of their website and the information collected through the questionnaire. Finally, the authors conclude that corporate identity and its communication, as a key component, is essential for SQM. Its investor relations department and website show that it is very important for the company to communicate to investors its identity.