2.  The Shareholders
 The Investment Community
 Security Analysts
 Investment Clubs

3. Individual Investor
•Lack the ability to understand or the inclination to strive to
understand complex financial data.
•Primary motive is family security.
•Interested in dividend policy, quality of assets and earnings.
Capital Gains Investor
•Primarily concerned with the future- historic growth of
earnings, role of change of that growth, and the anticipated
growth rate of future earnings.

4. Composed of:
•Stockholders
•Security Analysts
•Trust Officers
•Bankers
•Financial Counselors
Function:
Counsel individuals and
banks, insurance
companies, pension funds, mutual
funds, charitable
foundations, universities and
hospitals in evaluating, buying, and
selling securities

5. Functions
• Fact Finding
• Passing judgement
on the merits of
securities
• Criticizing the
financial practices
and policies of
corporations
They are employed by
institutional
investors, banks, brokerage
houses, investment counseling
firms, trust funds, and insurance
companies to keep them
informed about the financial
status of corporations.

6. Investment clubs are formed by small group of persons
who meet regularly to discuss the merits of investment
in particular corporations and to invest club funds. They
discuss investment objectives, study the principles and
techniques of investing, and make investments in
corporations after gathering information and weighing
the risks involved.

7. Corporations, through their shareholder-relations program,
are keeping these investors supplied with information about
corporate financial status and future prospects.
However, many corporations fail to understand the
importance of keeping the shareholders informed.

8.  To arouse owner interest in the corporation
 Create a better understanding between the company, its
shareholders, and the financial community
 Persuade stockholders to consume and recommend the
purchase of products of the corporation
 Reduce the turnover of shareholders and promote
holding of stock as a long-term investment
 Reduce stockholder criticism and organized opposition to
management
 Stabilize the market for corporate securities
 Raise the prestige of a corporation in the eyes of the
community by enhancing its standing among its owners

9.  A corporation, or anyone else involved in the sale of a
new issue of securities is prohibited from using public
relations as a part of the selling effort during or
immediately before the offering period
 A corporation should always avoid half-truths or false or
misleading publicity to promote purchase or sale of stock
 Price of a company’s stock should reflect company’s
earnings, finances, and management, and a higher price
should not be sought by publicity for the corporation and
its stock

10.  Prompt release should be made whenever there are
important developments which might affect security values
or influence investment decisions of stockholders or the
investing public
Following are the activities that should be avoided to ensure
compliance with the Securities and Exchange Commission:
 Manipulating stock prices
 Deliberate attempts to falsify a company’s financial
position
 overly optimistic sales and earning forecasts
 withholding important financial information

11. Corporations with limited no. of shareholders designate the
secretary or clerk to be responsible for communicating with
shareholders, arranging for the annual meeting , reporting
the proceedings, and handling all stockholder affairs.
In large corporations, a stockholder-relations section is
established in the public relations department under the
direction of a stockholder-relations manager responsible
for communication of information to the shareholders in an
effective manner.

12. 1. Shareholders relations policy is to convince the
corporation’s investors and shareholders that it is a
profitable long-tern investment.
2. Its operations are well-managed
3. It is dedicated to a progressive program of
production, sales, and growth supported by continuous
research and developments.

14.  Corporations conduct surveys because they want to
learn what investors think of the way management is
operating the company and how the company is
communicating with them.
 The principle methods of conducting shareholder
opinion surveys are mailed questionnaires and
personal interviews.
 Surveys are conducted at regular intervals by the
shareholder-relations section of the public relations
department, or by an outside counselor or opinion
research organization.

15.  Effective shareholder relations requires that the
corporation’s shareholder-relations staff know the
characteristics of the shareholder public.
 Mail surveys and personal interviews are the great
means to determine shareholder characteristics.
 By obtaining a better understanding of the
shareholder public, communication problems may be
solved more readily.

16.  Corporations inform the communications to the
shareholders in order of frequency.
 Corporations inform shareholders about their plans
for expansion, new product developments, new
financing plans, forecasts of sales, forecasts of
earnings, profits on overseas operations, marketing
strategy etc.

17.  Information should be presented to stockholders in
simple, clearly understood, nontechnical terms.
 Stockholder communications should be continuous
from the day a shareholder acquires his stocks until
he sell his holdings.
 Management should tell shareholders both sides of its
business story-the bad news as well as the good.

19.  The annual report
 Interim reports
 Notices of annual and regional shareholder’s meetings
 Shareholder magazines
 Annual report advertisements
 Shareholder correspondence
 Financial publicity
 Financial window displays
 Shareholder booklets and folders
 Promotional literature
 Reports of shareholder’s meetings
 Shareholder contests
 Employee-shareholder communications

20.  The corporation’s annual report is the primary medium
of communication in stakeholder relations and a
secondary medium of communication with non
shareholder employee, community, distributor and
supplier publics.
 The annual report is an opportunity a company has
each year to tell shareholders and other publics what it
has done, is doing and plans to do.
 It reflects a corporation’s image and the caliber of its
management and it may attract new investors and
affect the price of its stock.

21.  Annual reports include the following features:
o Financial information
o Production information
o Marketing information
o Personnel information
o Miscellaneous information
o Physical features of annual reports
o Illustrations
 Annual reports are distributed 15 days before the
annual meeting to news media including television and
radio commentators, editors, special financial
writers, libraries, educational institutions and members
of investment community.

22. In the intervals between annual reports, corporations
communicate with shareholders through interim reports
in the form of dividend enclosures, quarterly newsletters,
folders, booklets and bulletins.

23. Notices of annual meetings are mailed to stockholders
together with a proxy form on which absentee
shareholders may vote for directors and on matters to
be voted upon at annual meetings.

24.  Corporations publish quarterly shareholder magazines
and reports about company finances and developments
to secure understanding and support of owners.
 In addition to financial news, these periodicals discuss
new products, new plants and laboratories, research
and other subjects of interest to owners.

25.  Annual report advertising is placed by some
corporations in national consumer magazines and
newspapers in financial centers.
 These advertisements feature the highlights of current
finances, build prestige for a company in financial
community, and interest investors in acquiring
corporate shares.

26.  Correspondence with individual shareholders is an
important factor in good shareholder relations.
 A letter of welcome from president is mailed to new
shareholders. When a shareholder sells the stock, he or
she receives a letter of regret, with the hope that they
will again be numbered among the company’s owners.
 Some corporations make regular mailings to security
analysts discussing the economic progress of the area
served by the company.

27. Corporations communicate shareholders and general
public through press releases to financial
magazines, daily news services and radio and
television commentators.

28. Some large companies employ window display firms to
install displays of their products in brokerage-house
windows.

29. Shareholders are informed about corporate operations
through periodic mailings of booklets and folders
which cover a wide range of subjects, including
company
management, personnel, products, production
facilities, plants, industrial outlook and executive
speeches.

30. To inform shareholders about the company’s
advertising and products, proofs of
advertisements, booklets and folders and other
promotional literature are enclosed with stockholder
correspondence and dividend mailings.

31.  Shareholders who do not attend the annual or regional
shareholder meetings are mailed a post meeting report
of the proceedings.
 Shareholder magazines carry word and pictures stories
of shareholder meetings, condensed speeches by
executives and illustrations of owners and
management taking part in the program.

32. Shareholders are encouraged to participate more
effectively in the affairs of their companies by means
of contests offering prizes for constructive criticism
and suggestions on the operations of the company.

33.  The employee periodical is the principal
medium, along with annual report and booklets.
 Special editions of annual reports in simplified
terminology are prepared for employees.

34.  Shareholder films: Film are based upon a
corporation’s annual report and dramatize the
contributions to company progress and profits.
 Television: closed-circuit television broadcasts of
annual meetings are transmitted to regional meetings of
shareholders in other parts of country; making it
possible for shareholders who cannot attend the annual
meeting to witness the proceedings.

35.  Annual shareholder’s meetings
 Regional shareholder’s meetings
 Open houses or plant tours for shareholders
 Personal visits to shareholders
 Meetings with members of financial community
 Lectures and forums for investors

36.  The corporate laws of every state require corporations
to hold annual meetings at which shareholders have an
opportunity to exercise their rights to elect
directors, hear reports of management and transact
business.
 Annual meetings provides an opportunity for the
major executives of a corporation to establish friendly
personal contacts with the people who are supplying
the money to operate the business.
 The meetings provide face-to-face exchange of
information and opinion.

37.  To make it possible for more shareholders to attend
corporation meetings and participate in company
affairs, many companies hold regional meetings.
 These are attended by employee shareholders to hear
executives discuss the annual report, answer questions
and announce plans for expansions.

38.  It can be used to inform stockholders about
properties, operations and products of he company.
 It also gives them an opportunity to see for
themselves how their money is invested.
 These events feature speeches by executives, product
exhibits and motion pictures.

39. Management personnel visit shareholders to discuss
company finances and answer questions.

40.  Many corporations arrange periodic meetings with
security analysts and other members of financial
community to discuss corporate finances and
corporation progress; to answer questions; and to hear
the chairman, president, and other officials discuss
corporate finances and investment outlook for
corporation’s securities.
 These meetings are supplemented with tours of
company’s facilities, demonstrations of new
products, and motion pictures.

41.  Important lectures and forums in an investor’s
information program are given for shareholders and
prospective investors.
 Many department stores sponsor the lectures as a
service to their customers and local communities.