What Is Investor Relations?

What Is Investor Relations?

April 15, 2021

Regardless of the size, companies may have outside investors to help it stand on its feet and continue its operational success. As investors play a vital role in the company’s growth, it is of the utmost importance for businesses to maintain healthy relationships and communicate honestly with them in order to start and build trust. 

This is why companies have a dedicated Investor Relations (IR) department that acts as a link between the company and its investors. IR department is solely responsible for providing the investors with an accurate account of company affairs, thus keeping the line of communication and information open. Integrating finance, communication, and marketing, IR is considered a sub-department of the public relations (PR) department and helps connect the overall financial community. 

However, unlike conventional PR practices, all the operations of the investor relations department are tightly regulated and integrated with the company’s other significant departments, like the legal and accounting department and its CEO, CFO, and COO. 

Duties of investor relations professionals 

Depending on the size of a company, an IR department may extend to a team of people or be limited to a single person. Nonetheless, the duties and responsibilities of an investor relations professional remain the same. They include:

  • Enabling a company to achieve its optimum share price
  • Representing the company to investors and vice-versa
  • Providing non-financial data to support company valuations
  • Timely providing accurate financial information to investors
  • Observing the rules of stock exchanges and securities commissions
  • Building receptive capital markets for future financing
  • Presenting investor feedback to company management   

The significance of a productive Investor Relations department cannot be overstated. It can help a company maintain a loyal investor base and enhance its long-term shareholder value. Finally, a responsible IR team helps in building lasting credibility with the investment community.

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