The role of educational diversity in investor relations

Abstract

Purpose: The purpose of this paper is to show the role of educational diversity in improving investor relations (IR) quality and examine how this impacts the number of shareholder activism incidents a firm encounters. Design/methodology/approach: The paper reviews literature on marketing, finance, and corporate communications to develop a conceptual framework which is tested using a combination of secondary data and primary data collected through a survey amongst IR professionals working at companies in the Euronext 100 stock index. Findings: The empirical results support the conceptual framework, showing higher IR quality levels and lower shareholder activism intensity for companies with educationally diverse IR teams. In particular, the presence of marketing and communication experts in IR teams contributes to higher IR quality and lower shareholder activism. Research limitations/implications: Future research may investigate the robustness of the results with larger and internationally diversified samples and examine how, besides educational diversity, other organizational arrangements through which finance professionals work together with marketing and communication professionals impact IR quality. Practical implications: The results suggest that to improve their IR quality and minimize shareholder activism, companies should check and when necessary increase the educational diversity of their IR teams. Originality/value: This is the first paper investigating the role of educational diversity on IR quality and the impact on shareholder activism, developing and testing an innovative conceptual framework that integrates marketing, finance, and corporate communication theory.