The role of the mass media in investor relations

The purpose of this paper is to observe the investor relations (IR) process from the perspective of media sociologists.

The focus of the piece is the changing role of the financial news media in equities markets. It is based on two lengthy periods of research into the part played by communications in investment in the London Stock Exchange. The research looked at three sets of participants and three stages of the communications process: financial public/IR and the IR function, financial journalists and news reporting, and professional investors and their evaluation processes. Much of the work involved semi‐structured interviews with over 100 high‐level participants.

The findings suggest a slow decline in the importance of financial news media in the investment process. However, financial news also continues to play a significant role in trading in the city and can, at times, still have a powerful impact on investment patterns. Consequently, all sides – companies, IR practitioners, analysts and investment managers – continue to target and consume it.

The paper introduces readers to theories and research methods used in the adjacent research field of media and communications.