Section: Organisational and Strategic Communication
DIALOGIC PRINCIPLES ON INVESTOR RELATIONS WEBSITES
Christian SCHUMACHER, Johannes Gutenberg-Universität Mainz
Sascha HIMMELREICH, Johannes Gutenberg-Universität Mainz
The dynamic development of the internet has extended the possibilities for corporations to communicate with their stakeholders. Online communication tools, like a firm’s website, can be used to make all relevant information available to stakeholders anytime and to remotely interact with them. In this way, transparency and dialogue can be enhanced which may engender trust in the company. Whereas trust is an important objective of corporate communication in general, it is of particular relevance for Investor Relations (IR) where information asymmetry is particularly pronounced. Reducing information asymmetry and uncertainty and consequently gaining investors’ trust are main goals of IR.
There are various compulsory communication instruments in financial communication (e.g., annual report). Although a special IR section on the corporate website is not compulsory, the majority of listed companies use this tool in their IR practice. Do companies however exploit the web’s dialogic potentials here? Kent and Taylor (1998) introduced a framework for the study of dialogue on websites which comprises “five principles for dialogic communication on the internet”: Ease of interface, usefulness of information, generation of return visits, dialogic loop and conservation of visitors. Several studies have shown that the dialogic potential of the internet is still underutilized by different organizations (e.g., Park & Reber 2008). Drawing on Kent and Taylor, the purpose of our study was to analyze how companies listed in the German stock market’s prime standard (DAX, M-DAX, S-DAX) exploit the dialogic potential of their IR websites. Due to enhanced pressure and professionalization of IR in companies with a larger market capitalization, we expect differences between the indices in such a way that the level of transparency and dialogue increases with market capitalization from S- DAX (small) to M-DAX (mid) to DAX (highest). To answer our questions, we conducted a quantitative content analysis of the IR websites of the 130 companies listed in the stock indices mentioned.
Results show that concerning the principle of dialogic loop, most of the IR websites provide standard dialogic features like information on contact persons. Surprisingly, hardly any company (N=23, 18 percent) provides a link to a Social Web application (e.g., facebook, Twitter or Youtube). A contact form to ask for feedback from investors was found only on 14 (11 percent) of the IR websites analyzed. In support of our assumption that IR websites differ depending on market capitalization, we find that significantly more of the DAX companies (highest market capitalization) provide presentations and podcasts/webcasts from the analyst conference and information about the dividend than firms listed in M-DAX or SDAX. With respect to generation of return visits DAX firms also provide significantly more services like RSS-feed, an Email-newsletter or social bookmarks than their smaller counterparts. References Kent, M. L., & Taylor, M. (1998). Building Dialogic Relationships through the World Wide Web. Public Relations Review 24(3), 321--334. Park, H. & Reber, B. H. (2008). Relationship Building and the Use of Web Sites: How Fortune 500 Corporations Use their Web Sites to Build Relationships. Public Relations Review, 34(4), 409-411.