Financial communication is all communication of financial information from companies to external stakeholders including investors, analysts, lenders, suppliers and the media. It encompasses both mandatory reporting according to regulations and voluntary communication that aims to build understanding and confidence in a company’s financial position and future prospects.
Different forms of financial communication
Regulatory financial reporting is mandatory communication that all listed companies must publish. This includes annual reports that present the year’s results and financial position according to IFRS standards, quarterly reports and interim reports that keep the market updated on an ongoing basis, as well as year-end releases that provide preliminary information ahead of an annual report. Corporate communication is the proactive sharing of information that explains the strategy, business model and value creation of a company. This encompasses company presentations for investors and analysts, CEO letters and management commentary that provide management’s perspective, as well as Capital Markets Day presentations that offer in-depth reviews. Capital communications include press releases about financial results, acquisitions or other material events, earnings calls where management provides commentary and IR websites that centralise all financial information.
Target audiences
Different stakeholders have different information needs. Shareholders and investors want to understand a company’s performance and future prospects to help them make investment decisions. Financial analysts analyse information about a company and write reports that influence others’ decisions. Lenders evaluate creditworthiness and repayment capacity. The media report about the company, which influences public perceptions. Suppliers and customers follow financial information to assess a company’s stability as a business partner. Each target audience requires communication that is tailored in tone, level of detail and focus.
Differences between financial communication and IR
Financial communication is a broader concept that encompasses all communication of financial information to all stakeholders. Investor relations (IR) is the part of financial communication that specifically focuses on dialogue with the capital markets – shareholders, investors and analysts. Whilst IR focuses on share price and investment decisions, financial communication might also target lenders, suppliers or the media for other purposes such as credit assessment or public relations. An experienced translation partner with financial communication expertise operates according to ISO standards with ISO-certified system support and employs IFRS experts for financial reporting, copywriters for corporate communication, the four-eyes principle with dual review, an ICR (In-Country Review) platform for client validation and secure data handling with confidentiality agreements.