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School of Business | Department of Finance | Finance | 2014
Thesis number: 13792
Discussions about reflective IR practices among Finnish publicly listed companies
Author: Lehto-oksa, Antti
Title: Discussions about reflective IR practices among Finnish publicly listed companies
Year: 2014  Language: eng
Department: Department of Finance
Academic subject: Finance
Index terms: rahoitus; financing; pörssiyhtiöt; exchange-listed companies; mis; mis; johtaminen; management
Pages: 60
Full text:
» hse_ethesis_13792.pdf pdf  size:702 KB (718174)
Key terms: Present-day IR, Agency theory, Analyst herding, Securities Market Act, Ongoing Disclosure Obligation

The objective of this study is to discuss reflective IR practices among Finnish publicly listed companies. Put more elaborately, the objective was to assess why the phenomenon of top management explicitly commenting on the market valuation - which was present during the latest financial crisis - is not a persistent and systematic part of the IR agenda of Finnish publicly listed companies. In addition, this study intends to draw a landscape of present-day IR and its value creation, and the role of regulatory authorities, independent equity analysts and recent regulatory updates in it.


A grounded theory method for the generation of arguable propositions for the basis of research motif is adopted. Following this method, theoretical sampling is chosen as the means of data gathering. Research data consists of semi-structured in-depth interviews with members of top management of Finnish publicly listed companies, independent equity analysts and regulatory authorities.


It was found that the top management of a publicly listed company lacks on average professionalism regarding valuation and regulatory treatment of a public company's equity, and lacks incentives to the inclusion of reflective IR practices to their agenda. Also, the top management's attitudes towards regulatory authorities and recent regulatory updates significantly discourage any proactively oriented IR activities. Furthermore, the top management profession seeks to develop long term credibility in the investor community, and are found reluctant to risk this personal asset. Finally, the equity analysis profession is able to satisfy the investor community regarding the information asymmetry arising from the incentive misalignment in between the representatives of top management and investors, when weighted by pros and cons alongside the reflective methods assessed in this study.
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