Financial Communication

Corporate Message Framing

In the 1960s and 1970s, companies began to actively seek to create messages that positioned companies as desirable to potential and current shareholders. This included evolving annual reports to include a variety of different tactics (e.g., speeches and multimedia presentations) to arouse investor interest. This evolution was accelerated in the 1980s in response to corporate raiders aggressively pursuing companies in hostile takeover strategies. In the 1990s, companies invested in public relations professionals who were tasked with framing a particular company to appeal to investors.

After a series of financial scandals (e.g., Enron and Worldcom) at the dawn of the 21st century, public pressure over unethical financial communication practices resulted in the Sarbanes–Oxley Act. This act included standardized procedures to ensure accurate financial reporting and established penalties for manipulating financial records and for retaliation against whistle-blowers.

Consumer Socialization

A significant portion of financial communication also stems from research on consumer socialization, which began in the 1970s. Consumer socialization scholarship arose from interest in how marketing and advertising affected younger audiences. At the time, there was a lack of empirical evidence to help public and corporate policymakers. As such, researchers set forth to study the different influences on children’s consumer attitudes and behaviors, how children process consumer information, and how other socioeconomic variables impact consumer learning in children. These studies sparked an interest in how children think and behave in a consumer-driven world.

Consumer socialization research details several socializing agents that influence the development of consumer skills, attitudes, and behaviors. This socializing process occurs through modeling, reinforcement, and social interaction socializing agents such as parents, peers, and mass media. While much of the work has been conducted with children and adolescents, researchers agree that consumer socialization occurs across the lifespan.

Parents, and mothers in particular, have the most influence in the consumer socialization of younger children as they have the most opportunities to model, reinforce, and interact with children. Parenting style, family communication style, and socioeconomic status impact children’s learning of consumer attitudes and behaviors. Financial communication research examining the messages parents explicitly and implicitly send their children extends consumer socialization work that examines more general family-level variables.

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