FINANCIAL COMMUNICATION: FRAMEWORK AND PRACTICES - 2019 EDITION

137 2  z FINANCIAL MARKETING ANDTARGETING The role of Investor Relations is not limited to the dissemination of quantitative data at regular intervals and in accordance with regulations. It is also responsible for identifying the company’s shareholder base as precisely as possible and then, based on a solid understanding of how the financial markets work and its own knowledge of different players, suggesting particular investors who are most suited to the company’s strategy. Should any changes be made to this strategy, investor targeting should be realigned accordingly. This approach should form part of a pro-active marketing strategy that covers the needs of investors and generally aims to: n diversify the profiles of the issuer’s investors, with respect to the amount of capital they manage, their investment strategy or their geographical origin; n create a healthy balance between stable shareholders and those with a shorter-term investment strategy, which contributes to the liquidity of the company’s shares; n support strategic developments (sale or acquisition of business activities, diversifications, growth of a business that could have an impact on the value of the company, etc.) by adjusting the profile of the target investor; n anticipate changes to the shareholder base that could affect the company’s development. With this in mind, the implementation of an effective marketing strategy is intrinsically linked to the size of the issuer and its percentage of free float; n internally, these two elements often affect the resources (number of employees, budget, etc.) allocated to Investor Relations and the availability of management to meet with members of the financial community (frequency of meetings, seniority of stakeholders, etc.); n externally, these factors tend to have a major impact on the coverage provided by analysts, i.e., the number of research and brokerage firms covering the stock, or even the quality of the coverage. Some stocks whose capitalisation is deemed too low are covered only by generalists, rather than by industry specialists. Moreover, the smaller a company is, the greater the investors’ desire to meet its executive management. Lastly, small companies are less likely to attract the interest of foreign investors, which often only follow the largest stocks included in leading indices, with the exception of companies that are market leaders or are present in niches that attract special interest, such as new technologies. IDENTIFICATION OFTHE SHAREHOLDER BASE The ease with which shareholders are identified depends on whether the shares are primarily held in registered form (whereby the issuer knows the identities of the holders) or bearer form (whereby the identities of the holders are only known to their banks). In the first case, the share register provides detailed, complete and up-to-date information. For shares registered on a “pure registered” basis, the company ensures the provision of all custodial services. If shares are held in “administered registered form”, the management of the company’s shares is entrusted to a financial