adminZimbabwe continues to be a major attraction for investors from across the world, which could be an indication that the country is ripe for much needed investment.
The country’s response to this investor interest has been encouraging with Government taking the lead to ensure that the country facilitates this investment.
Just as the response is cascading from the macro to the micro-perspective, so too is it cascading downwards from the national perspective to the corporate perspective.
It is at the corporate perspective that PR becomes a crucial element in organisational investor relations programmes (IRPs).
As a continuation to the utilisation of PR in corporate IRPs, it is important to further enlighten organisations and PR practitioners on how they can make PR crucial in investor relations.
IRPs create familiarity between an organisation and its investors in the areas of economic objectives and policies, borrowing plans and public debt management.
This familiarity between the corporate world and its investors is perpetuated by well-planned PR programmes that accompany these IRPs.
PR ensures that an IRP of an organisation provides a company with a forum to conduct dialogue with investors that offers an opportunity for an exchange of information and views during relatively normal periods.
Econet Wireless Zimbabwe has had this advantage especially with investors from the insurance, banking, furniture and property sectors.
Engaging in well-planned IRPs bring with them transparency and trust between an organisation and its investors.
They also ensure an improvement of relations between companies and their investors especially creditors.
Transparency, trust and good reputation are all evidence of an organisation that invests in its PR programmes.
Investors need to be reassured that their investment is safe and that reassurance lies squarely in the brooding hands of public relations.
Implementing a good IRP is an advantage for companies in that it creates conditions for common knowledge of the data and information on public sector activities that are critical to investors’ decisions.
In the same vein they also gather information that is essential for the public sector’s operations.
Gathering such information and data is a task for the information bureau office of the organisation which is the PR department or unit.
Common knowledge of the data and information of the public sector activities may reduce information risk which is a situation where some investors have more information than others. This gives rise to uncertainty, which in turn leads investors to demand a premium to compensate for the risk.
When investors are in a position to obtain the same information on the financial situation and prospects of a corporate, it may be possible to reduce information risk.
However, this requires a continuous effort to inform the market as new data and information become publicly available and this effort rests on PR.
Strategic IRP adds value and is helpful to management and investors. One way for investor relations to be strategic is to statistically determine what really drives your company’s long-term stock price performance or valuation.
Identification of the value-driving metrics helps management focus where the company is most competitive and has potential for the most returns.
Most companies use the value-driving performance metrics to maximise executive management decision making.
Company leadership embraces or adopts the value-driving metrics as its guiding light or roadmap for creating shareholder value.
In this case the management of company would be able to utilise the most important value-driving metrics in its capital allocation process and other business decisions.
The management can always do this with advice from the PR practitioner or department, as well as, other relevant units of the organisation.
Another advantage for companies when they carry out IRPs is that they are able to increase and enhance management credibility and at the same time reduce the cost of capital.
Investors’ trust in the company and the credibility of company management increases dramatically when the company gathers investor perceptions through IRP and PR initiatives. In this case investors have a more positive view of the company management and operations.
When the chief executive or other member of senior management are not popular among investors, it helps to highlight the depth of management to investors.
This can show a different and balanced perspective to investors. In this way, the company is able to retain its institutional shareholders and attract new shareholders every time.
The depth, character and mood of management are always shown by a consistent reflection of the company and its leadership through image and reputation PR programmes.
Any organisation that appreciates the role of every department, including PR, in enhancing and creating an affable investor environment plays a crucial part in taking Zimbabwe to another level in this investment wave.
Hence, the country needs every individual, department, group, entity and corporate to take their positions as the investment breeze sweeps through the country.
- This article has been inserted by the Zimbabwe Institute of Public Relations. For feedback, comments and inquiries on the work of ZIPR, please email [email protected].
Online Reporter