What Is The Importance Of Investor Relation

An investor relation is a strategic management responsibility tool. It is capable of incorporating finance, communication, marketing and advertising, securities law compliance in order to initiate the most effective communication between a company and the financial community and the other constituencies that assist in achieving a company’s security valuation. Investor relations is a department in a company that is primarily focused on handling the queries of the investors, shareholders and those who might be interested in investing in the company. The investor relations department could be found in various medium to large-scale public and private companies. The investor relations department offers investors the accurate and exact account of a company’s finances and other affairs. This assists the private and institutional investors to make decisions before investing in a firm. This department works in order to maintain a healthy and transparent relationship between a company and its investors and shareholders. The structure of an Investor Relations Department in an organization An investor relations department will consist of a person who will directly report to the CFO of the company. In many companies, the investor relations department is managed by a public relations team or the corporate communications department. There are dedicated IR officers who look at the shareholders' meetings, press conferences and private meetings with investors. They help in creating annual reports. This department also incorporates the company’s policy on corporate governance and corporate social responsibility. The department is always aware of all the current and future issues that the organization may face. Financial analysts work closely with corporate secretary on legal and regulatory matters related to the investment. The investor relations officers also report to the CEO and board to directors and the president of the corporation. Investor Relation often has a role in crisis management such as corporate downscaling, changes in management or inside structure, product liability, and industrial disasters.

What is the importance of investor relations in an organization? Investor relations in an organization help in building strong interpersonal relations with investors and shareholders. Some of the advantages of an investor relations team in an organization are as follows- 1. Investor relation enables one to be accountable to the company and all the investors. 2. It encourages and motivated the ongoing evaluation of the company’s finances and the business model on a monthly, quarterly and annually basis. 3. A strong and well-developed investor relation will make the investor identify the areas of growth. It will help form a stronger and more perspective partnership and new business angles. 4. A powerful and good investor communication and a well-recorded and preserved documentation of a company’s performance will help attract new investors. 5. Investor relation department helps the company manage its relationship with its following investors from the very start and helps in developing the infrastructure early on during the business phase. 6. Investor relations will maintain a loyal shareholder and investor base. 7. It will enhance long-term shareholder and investor value and build stronger ties. 8. It is cost-effective and consumer lower cost of capital. 9. Investor relations serve to build long-term credibility with the investment community. Click here to visit Aegis Communications for IR services.