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Investor Relations
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Introduction:

 

 

This module will focus on “Investor Relations”. Further reading on this paper would help you understand fully the purpose or essence of Investor Relations.

 

This lesson gives you the idea to better appreciate the presence of investor relations and it’s principles of investing.

Objectives:

 

 

œ    To further understand the purpose of Investor Relations.

œ    To discuss the significance of having Investor Relations.

 

 

 

WHAT IS INVESTOR RELATIONS?

 

œ    It is a specialized practice within the PR industry representing corporations to investors, regulators and the media.

œ    A process which the corporation communicates with its investors.

œ    It is an activity to which a company discloses information required for investment judgment timely to the bond and or to shareholders.

œ    A department within a public company that distributes information about the company and its financial performance to existing and potential shareholders.

 

 

 

PRINCIPLES OF INVESTING

 

          There are seven (7) fundamental principles of investing that every investor should know. Topics include:

 

  1. Knowing your current situation.
  2. Goals and risk tolerance.
  3. Getting your finances in order.
  4. Thinking long term.
  5. Focusing on Stocks.
  6. Researching and monitoring your investments.
  7. Knowing when and how to get financial help.

 

 

NATIONAL INVESTOR RELATIONS INSTITUTE (NIRI)

 

NIRI is a professional association of corporate officers and IR consultants responsible for communication among corporate management, the investing public and the financial community. NIRI has over 4,500 members in 36 chapters around the United States. NIRI sets the highest standards in education designed to advance the practice of Investor relations and meeting the growing professional development needs of those engaged in the field.

 


 

INVESTOR RELATIONS FURTHER DISCUSSED

 

To practice investor relations, a communicator needs thorough knowledge of the global investment community. These should include important intermediaries between individual or institutional investors and companies such as financial analysts, stockbrokers or registered representatives and reporters or editors from influential financial publications.

 

At the same time, the communicator needs to know the messages a company must deliver to those critical audiences to inform and persuade. These messages should be designed with the organization strategic direction in mind. Therefore, investor relations practitioners tend to become involved with discussions relating to where the company is heading and how it plans to get there. Only then can the practitioner have the information to respond accurately to questions and, more importantly, develop communications plans to address the reasons why the investors would want to own stock or bonds of the company.

 

Fundamentally, what the investor wants is an understanding of the strategic direction of the firm and what competitive advantages will allow it to be improved returns for the shareholder. The investor relations professionals know intimately the issues and concerns of the investor.


 

Once you have developed an approved plan with specific goals, you will need to use multiple tactics:

 

œ    Annual Reports

œ    Quarterly Reports

œ    Fact Books or Fact Sheets

œ    Presentation before financial audiences

œ    Press Release and Reprints of News Articles

œ    Letters or Bulletins

œ    and a variety of telecommunication devices from the internet to the old fashioned telephone

MEETING THE NEEDS OF THE FUTURE

 

 

          You must be computer literate and willing to keep up with the information trends of the investment community. In addition, you/ they must understand marketing and finance. Those without a strong grounding in numbers must become conversant in what they mean and help to translate the meaning to others. Of course, excellent written and oral communications skills are necessary along with a strategic planning orientation. The ability of the investor relations professional to communicate effectively is essential.