Investor Relations

116INVESTOR RELATIONSanticipate the market’s reaction. Brought into the process as early on as possible,the IRO can offer crucial advice on shaping the messages that will bereleased to the market.If the transaction is large enough, the press release may be followed by aconference call or information meeting with appropriate visuals and supportmaterials, such as questions and answers (Q&A) documents.The same timing and transparency apply when a key business is sold.Assuming the acquisition is not a hostile takeover, buyers and sellers shouldtry to agree on their respective messages.3.5.6 Corporate Governance and Internal ControlCorporate governance is a separate legal requirement that must be addressedvia financial communications. It covers the following areas:The organization, composition, role, and operations of the board ofdirectors;Special committees (such as compensation, audit/accounts, nominations)Assessments of the board and committees’ work.Studies show that there is a correlation between strong governance and highprofitability. Thus, some companies go beyond legal obligations and useInvestor Relations to highlight the excellence of their corporate governance,notably focusing on the following:The high proportion and competence of independent board members;The existence of a code of ethics or code of conduct, notably governingthe trading of company shares by directors and management;Executive compensation policy;How shareholders participate in the company’s operations. Good corporategovernance allows them to submit resolutions to the AGM, ask forrepresentation on the board, and prevent a dilution of their holdings inthe event of a hostile takeover bid.IROs work closely with the company’s legal department in this area. Theymay suggest, for example, that a press release be issued to announce theappointment of an independent board member. All are jointly involved inthe preparation of the AGM.