Investor relation is an essential sub function of a company’s corporate communication program. The main goal of any business is to maximize shareholders value, so they must communicate their progress towards that goal to the investing public. The national relations institute defines investor relations as “a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective Two-way communication between a company, the financial community, and other constituencies, which ultimately contribute to a company’s securities achieving fair valuation.”
The following are the key objectives of investor relations:-
· Explain the company’s vision, strategy, and potential to investors and conduit constituencies such as analysts and media.
· Ensure that expectations of the company’s stock price are appropriate for its earnings prospects, the industry outlook and the economy.
· Reduce stock price volatility.
The IR function communicates both directly and indirectly with investors. The direct communication occurs to intermediaries such as analysts, the media and rating agencies. Communication with these constituencies influence stock price volatility and in turn the firms cost of capital and reputation.
The following are the key objectives of investor relations:-
· Explain the company’s vision, strategy, and potential to investors and conduit constituencies such as analysts and media.
· Ensure that expectations of the company’s stock price are appropriate for its earnings prospects, the industry outlook and the economy.
· Reduce stock price volatility.
The IR function communicates both directly and indirectly with investors. The direct communication occurs to intermediaries such as analysts, the media and rating agencies. Communication with these constituencies influence stock price volatility and in turn the firms cost of capital and reputation.
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