Investor Relations is a strategic management practice that combines finance, marketing and ethics to create the most effective communication between a company, the financial community and other relevant parties, which is responsible for a company’s securities achieving fair valuation. Investor Relations often refers to the department of a company responsible for handling inquiries from shareholders and investors, as well as others who might be interested in a company’s stock or financial well-being. The department generally reports to the Chief Financial Officer or Treasurer, and in some companies, investor relations is managed by the public relations or corporate communications departments. Investor Relations is considered a specialty of public relations by the U.S. Department of Labor and may also be referred to as financial public relations or financial communications.
Many larger companies have dedicated investor relations officers (IROs), who oversee the majority of shareholder meetings, press conferences, private meetings with investors, investor relations sections of company websites and annual reports. The investor relations function also may include the conveyance of information relating to intangible values such as the company’s policy on corporate governance or social responsibility.
Any investor relations department must be aware of current and upcoming issues that an organization or issuer may face, especially those that relate to trustee duty and organizational impact. It must be able to assess the various patterns of stock-trading that a public company will likely experience, often as the result of research reports issued by financial analysts. The investor relations department must also maintain regular communications with the Corporate Secretary on legal and regulatory matters that affect shareholders.