Investor Relations refers to the combined efforts of finance, communication and marketing, to effectively control the flow of information between a public company, its investors, and its stakeholders.
Investors play an important role in the success and growth of a company. And therefore, it’s very important for companies to maintain strong and transparent relationships with their investor community.
This is where the role of investor relations takes full effect. Typically, companies can choose whether they want to bring investor relations in-house, or outsource this function to a team of professionals.
The role of investor relations usually incorporates the coordination of shareholder meetings and press conferences, releasing financial statements, holding financial analyst briefings, publishing reports, and speaking to the public in the face of a financial crisis.
THE GOALS OF INVESTOR RELATIONS
- Providing financial information to a company’s investors
- Keeping up to date with the rules of securities commissions and stock exchanges
- Presenting investor feedback to a company’s board of directors and top management
- Providing non-financial data to support company valuations
- Handling the media and the public in the face of a financial crisis
- Enabling the company to achieve the optimum share price that reflects the fundamental value of the company
INVESTOR RELATIONS AS A PORTAL
Investor relations acts as a portal through which investors and company executives communicate. However, anyone who is interested in, or requests, financial information from a company will be pointed in the direction of the investor relations professional. This helps free up the load of C-suite executives, who can focus on seeing to the running and growth of the business.
In addition, investor relations professionals are seen as financial translators. They know the language that investors speak, and they know the figures that mean the most.
Being the gateway to the investor world, they ensure the company is being portrayed correctly, and are able to relay outsider perceptions to the company’s executive committee.
THE NEED FOR INVESTOR RELATIONS
After the Sarbanes-Oxley Act passed in 2002, it became imperative that all publicly traded companies started meeting increased reporting requirements. This created a higher demand for investor relations, either in house or outsourced to a professional firm, who would be dedicated to reporting compliance, and to accurate dissemination of financial information.
Since 2002, there seems to have been a consistent and evolving push for companies to remain more transparent and honest with their investor community.
BENEFITS OF INVESTOR RELATIONS
The benefits of a professional and experienced investor relations team is as follows:
- Maintaining a content, loyal investor and shareholder community
- Enhancing and improving value offered to shareholders
- Building a strong reputation, and credibility, with the investor community
- Freeing up time for C-suite employees to focus on business growth
- Handling communication with the public sector in the event of a crisis
Do you need the services of an experienced and qualified investor relations firm?
Equity Alliance International helps tell your story to investors who want to hear it. Not only do we help create an awareness and understanding of your company among the investor community, we also help companies gain access to capital and achieve liquidity in, and fair valuation for, their shares.
Want to learn more about our services? Get in touch with our team today.