Investor relations meetings: Evidence from the top 500 UK companies

Meetings with analysts and investors are an important part of the investor relations process. I develop a two‐dimensional dynamic model of investor relations and derive five research questions about investor relations with particular emphasis on investor relations meetings. To answer the questions I obtain data in 2002 from company managers using a questionnaire survey of top UK companies. Comparative data from 1991 is used to establish whether company‐ or market‐side change drivers have led to changes over time. A key research question seeks an explanation for the differences in level of IR activity between companies. I develop a cross‐sectional model and test the model using survey data. Key findings are that one‐to‐one meetings were ranked as the most important communication channel with analysts and investors both in 2002 and 1991. Companies were positive about their relationship with analysts and investors with similar perceptions to those held in 1991. An explanation of recent results, the creation of shareholder value and discussion of company strategy were rated as the most important issues discussed at IR meetings. The level of investor relations activity, as measured by the number of one‐to‐one meetings and audience size, had increased over the period. Agreater number of one‐to‐one meetings were held by companies with a higher number of institutional investors, greater analyst following, foreign listings, extreme market‐to‐book values and recently issued share capital. The size of the audience for investor relations meetings of all types was largely driven by company size and analyst following in respect of sell‐side analysts. The existence of foreign listings was the most important explanatory variable for the size of the audience of buy‐side analysts and fund managers.