Behind closed doors: Exploring the conduct of private meetings between investor and company representatives

Abstract

This paper explores the role of face-to-face meetings between corporate executives with fund managers and analysts from their major investors in financial market reporting. Prior literature has shown that these meetings are highly valued by investors, yet has proposed contradicting theories as to the role these meetings play in financial markets. In contrast to prior work’s indirect accounts of these meetings as retold by interviewees, our study is based on a unique empirical access to directly observe 39 private meetings hosted by four large listed companies, as well as a range of documentation and preparatory work in connection with them. We draw on a social interactional approach to theorize that these meetings play a distinct role in the financial reporting environment of capital markets as a practice ground for fund managers and analysts to learn to discuss financial reporting numbers of their investee companies in a credible manner. The paper details how the ordering of interactions in these meetings conditions the possibility for certain processes of practicing and learning to unfold in the ongoing flow of investor questions and corporate answers. We suggest that the attainment of simplified narrative scripts during the meetings affirms fund managers and analysts in their role as investment professionals and endows them with an interactional resource to be used in subsequent interactive settings with their clients and other investment professionals.

Keywords: Financial reporting, investor meetings, capital market interaction, qualitative research method, interaction order, narrative scripts

JEL Classification: M40