The Role of Financial Communication in Public Share Issues : an analysis of the Belgian Experience

Purpose - The first public share offer represents a crucial step in the life of a company. When the firm places shares linked to its business activity on sale in the financial markets, it is taking a strategic decision of major importance because this is going to involve shareholders who will subsequently become real partners in the organisation. This paper attempts to determine the place of financial communication in the company with regard to its general situation. Design/methodology/approach - Analyses the key role played by the financial communicator and the organisation he represents in determining the type of communication needed so as to prepare for the first public share issue. Examines the initial results of a quantitative analysis (carried out by means of a questionnaire) of the importance attached to financial communication by managers of firms present on the Belgian financial market. Findings - Financial communication is a form of communication that is still growing. The appearance of new technological tools seems favourable to this development. It seems that the information obtained by means of the questionnaire confirms not only the theoretical approach concerning the various targets, but also the role played by some specific players such as the press. It also seems that the development of the internet allows one to devise elaborate new approaches to the question so that one can contact a lot of people (more often with the same message) everywhere in the world and at a price which is reasonable. It is also interesting to confirm the attention given to specific events in the financial life of a firm. As a matter of fact, the budget allocated to financial communication is almost doubled in the case of a public offering. Research limitations/implications - The initial results are not representative enough to allow the drawing of conclusions about the global population of firms concerned. Originality/value - The present paper can be envisaged as a pilot study insofar as it allows one to highlight certain development axes which could be interesting, such as the impact of new technologies on financial communication or the influence of the various stakeholders on a share issue and in its future enhanced value on the market.