What is Financial PR?
Simply put, communicating with the financial public is known as financial public relations. But, then, if all publics are equal in the eyes of PR, how do some publics come to gain special importance with the same PR? In fact, these special publics are quite sizeable in number and form dominant groups in the domain of financial public relations. They matter more to the organization although no PR and management can ignore any public, and effective communication with all of them is essential for the existence of the organization itself.
In general, the financial public, who are of immediate concern to the organization, comprise the following: i) the registered shareholders;
ii) the investing community including potential shareholders with available funds for spending or saving; iii) the direct financial community consisting of banks and financial institutions, stockbrokers, and a variety of key players in the global money market, individual or institutional; iv) the financial and economic press in particular should include a large number of newspapers, trade journals other publications and the electronic media in general, who evince interest in economics and finance; and v) the audience in the market scenario comprising the business community, politician, customers, employees, and on specific occasions, the general public.
Role of Financial PR
The role and importance of corporate and financial public relations has come for revaluation against the backdrop of intense communication activity in the financial sector. A sense of vision, objectives, values, styles and appreciation of its own role are the guiding factors for the PR in the centre stage. PR has several avenues of exposure and success to perform its role in the widening canvas of financial public relations. A few examples: i) Assist the company in achieving the corporate objectives. One of the most important considerations for any company is to look after the interests of its shareholders. (There are many companies which do not even respond to their shareholders’ enquiries. One can imagine the plight of their customer). ii) Effective communication can play a crucial role in creating investor awareness. It can give a boost to the share price provided the campaign is backed by good performance thereby encouraging business development. iii) The host of communication tools at the command of PR are essential to any company going public whether in the private or in the public sectors. PR communication, in good and effective form, can provide the opportunities to deliver correct messages to all those involved in the evaluation of the financial performance of a company. iv) In the overall communication activities, it would be necessary to identify the status and role of PR in the financial management of the enterprise. Here, the top management would be required to acknowledge the role PR can play in the realms of raising of capital, tackling capital resources and ensuring business development on a continuous basis. v) PR has to be adept in the management of change in the context of the challenges and opportunities of PR tools and methods in the fast changing financial services. vi) In its own professional interest of business as a whole, PR must come to full grips with business finance. In fact, many PR persons have been ruined by financial illiteracy while dealing with the financial media.
The financial picture of the company should be crystal clear to PR persons and they will be expected to understand key financial statement. Primarily, any PR person involved in financial communication should possess the accountancy concepts and accounting language, and acquire the basic knowledge of important accounting terms. Some of them are: •...