Financial Public Relation Essay Example

Financial Public Relation Essay Example Financial Public Relation Essay Financial Public Relation Essay Financial Public Relations 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; i) 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. Rol e 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). i) 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 communicat ion 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: Structure of Balance Sheet and Profit Loss Account. Return on capital employed and return on shareholders’ capital. Gross Profit, net profit and taxation issues. Control of working capital and liquidity. Cost concept. Depreciation expenses. Investment and Dividend. Market Capitalization, debt and equity. Profitability index. Budgets and plans. Key strategies and operating concepts. The Press The Press will continue to play an ever- increasing role as a means of communication by companies to various categories of investors and the financial public. The press activity helps the shareholders, potential investors and analysts to maintain a record and understand the performance of the company on the financial front. Media Relations An effective media relations programme aimed at creating a suitable environment for sustained and honest relationship between the company and the media is an essential requirement for the success of any business enterprise. PR has to make a judicious selection of newspapers, journals and electronic media as also billboards, hoarding etc. towards gaining the support of the investors and for boosting the image of the company and its public issue. A checklist for the Media Plan will be helpful in achieving the objective, that is, to make the most of a media plan. REACH: How far does the projected media information provide a picture of the real situation? Available data cause more confusion than clarity. ATTENTION: Innovative steps through electronic media are restricted but instant. In press, the possibilities are endless. Both must co-exist, each with its own advantage. DURABILITY: Press advertisements have a better longevity. TV, on the other hand, might carry a lasting impression in the mind AUDIENCE: Press can attract serious reader on a sustained basis. Electronic media has the attraction of bringing newer breed of people to its fold. INFORMATION: Press can easily pack in much more detailed information which the Financial reader constantly need. TV can flash the bare essentials Which are just not enough. Press Release Press releases are a traditional method of handing out information and is a useful tool with the PR professionals. Two important factors in a financial press release are: a) The released story point of view that is, the news may have an impact on the share price of the company. Even change of guard at the helm of affairs may create a flutter in the market. b) High news value press releases have to be sensitively handled in favour of the company. ) Press releases are to be made according to the needs and available space of particular publications. For instance, specialist financial and economic journals and newspapers can easily accommodate quite a long, sizable story whereas some others will have little or moderate space. Therefore, there is need for subdividing a release into long and short hand-out s. d) A golden rule in dealing with the press is not to rush out with a press release until opposing factors have fully been taken into account. Many times it has been observed that a defensive release on an issue when the matter is under surveillance by the press just adds the proverbial fuel to the fire. However, in financial press releases, it pays to be free and frank; keep the initiative but avoid clever tricks and cheap gimmicks to impress or win over the press. Press Kit Preparing an appropriate press kit, specially in the event of a financial press conference, is of crucial importance. What should go into a press kit? Checklist for an ideal Press Kit a) A major press release is always expected at a major press meet which normally sums up the event. b) A bunch of photographs will be useful. These may include portraits of newsmaker and general, sometimes specific view of production or service operations, product photos etc. Instead of photos, or in conjunction with photos, an artist’s depictions of a physical object are effective as well. c) Brochures and biographies are useful hand-outs. Brochures, in addition to providing a succinct history of the organization, must give detailed financial particulars in which the media will find background information about the company. Biographies must pertain to achievements of the top management persons in achieving the financial goals. d) It is a good idea to provide a text or summary of the speech of the main speaker in the press kit. This simplifies the job of the media people and they appreciate it very much. The speaker has to stay quite close to the circulated text during his actual speech, otherwise, there may be confusion leading to inaccurate reporting. e) Annual Report of the Company providing balance sheet and a statement of profit and loss account of the company during the last one year. A question-answer session will be used to clarify points mentioned in the text of speech or when the journalists make reference to issues which are related to the main topic or to the functioning of the company. This is risky ground which has to be treated cautiously. Annual Report An annual report is the most essential and first-hand communication to introduce the company to the financial public as well as to financial collaborators. It is an obligation on the part of the management to present audited accounts of the company before the shareholders at the annual general meeting. The annual reports would have passed through phases of dynamic changes but the basic requirements are: i) Chairman’s speech. ii) Report of the Board of Directors. iii) Balance Sheet. iv) Profit and Loss account. v) Auditor’s Reports.