The domain of investor relations largely combines the aspects of marketing, communication, and finance for the purpose of controlling the flow of information between a company, its stakeholders and its investors in an efficient fashion. Scott Tominaga mentions that professionals working in investor relations departments tend to be the backbone of any firm as they are the key channel of communication between the important stakeholders of the enterprise. It is their duty to provide both transparent and accurate investment information to discerning stakeholders, which is then used to both define and devise future investment routes and future goals of the company.
Investors have a key role to play in the overall growth and success of any company. Hence, paying heed to this fact it is crucial for all companies to maintain a positive, strong and transparent relationship with their investors. Scott Tominaga mentions that the continuation of the operational success of almost any firm depends a lot on their investor relations, and therefore it is crucial to communicate honestly and effectively with these stakeholders.
The contemporary corporate world relies significantly on a well-established and robust Investment relations department, and without the presence of such the stock prices of a firm may even become stagnant. This happens due to the fact that no investor these days would like to invest in a firm where they are not provided with transparent financial information. Investors ideally seek out a clear and concise financial report that is made by the investor relations department. This report carries both good and bad statistics and financial figures of the firm, so that the investors get a clear idea about what to expect from their investment.
While highlighting the diverse roles are responsibilities of investor relations professionals, Scott Tominaga discusses the key goals they have. Some of these goals include:
- Representing the firm to discerning investors, while also acting as the representative of the investors inside the company
- Enabling the company to competently achieve the optimum share price which would reflect their fundamental valuation
- Providing the necessary financial details and information to the discerning investors in a both accurate and timely manner
- Offering the necessary non-financial data for the purpose of supporting company valuations
- Observing the rules and regulations of the relevant securities commissions and stock exchanges
- Ensuring that the company does not get involved in aggressive sales promotion or “closing”
- Presenting investor feedback to company management and the board of directors
- Building receptive capital markets with the aim of ensuring future financing for favorable terms
The primary responsibility of professionals working in the department of investor relations is to take important insights from the management of the company, create the annual financial report of the firm, monitor or oversee stock prices movement, as well as provide the stakeholders with both accurate and transparent information when it comes to the finances of the firm. The smooth working of the investor relations department of a company is crucial to the longevity of a firm.