Investor relations definition
/What is Investor Relations?
Investor relations is a department within a publicly-held company that is responsible for keeping investors informed about activities within the business. The intent is to assist the investment community in making decisions about investing in the business.
Investor Relations Activities
The investor relations staff routinely goes on road shows to meet with both existing and prospective investors, to talk about what the company is doing, its financial results, and why it is a good value proposition for them. These road shows may also be targeted at raising more money for the firm.
The investor relations team will likely need to meet with institutional investors one-on-one, to answer more detailed questions about the company, in terms of its strategy, operations, and finances. The team also coordinates investor meetings, conference calls, press releases on financial matters, and briefings with outside analysts. A particularly important role is dealing with analysts, since their reports set expectations for the company’s share price with the investment community.
Investor relations personnel need to coordinate their activities and public statements with the accounting department, legal department, public relations department, and senior management team, to ensure that they do not stray from official company positions, and do not discuss any non-public information with outsiders. In the latter case, the inadvertent release of non-public information will require an immediate press release containing this information, so that the non-public information is made available to the investment community at large.
Related AccountingTools Courses
Public Company Accounting and Finance
When to Create an Investor Relations Department
The investor relations department is usually formed prior to a company’s initial public offering, when it can begin to develop a consistent message about the purpose of the company. It can then begin disseminating information about the company to investors.