Investor Relations

Is Investor Relations an art or science?

Investor Relations refers to the Responsibility of managing communication between a company's corporate management and its Investors. IR is both an art or science. It is a Strategic Management profile where a person needs to possess communication, finance, marketing and security laws knowledge to manage Investor Relations. 

Sarbanes-Oxley act 2002 is a US federal law that mandates certain practices in financial record keeping and reporting for corporations. After Sarbanes-Oxley act 2002, the IR profile has seen significant growth.

Sarbanes-Oxley act emphasized the need for IR management in the finance industry.

Investor relations falls under the bracket of Corporate Finance. 

IR is a crucial function for any listed company. A competent IR team not only raises the profile of the company but also the value it's securities. Due to it's strategic nature, the role demands the diverse skill sets from a professional. The one who is working as IR needs to have knowledge of finance, as well as a strong understanding of the business or sectors or organization operates in, the macroeconomic factors, and the corporate strategy and various processes within the organization.  Also, having above average communication skills and knowledge of security laws is an advantage. Due to this IRs are "Jack of all trades, master of none."

This profile is kind of Functional Orphan. IRs can have very distinctive backgrounds, coming from marketing, the sell side, treasury, communications, finance or a host of any other areas.

The main responsibility of IR is to think from the Investor's perspective. By putting yourself in Investor's shoes one can perform better in this role.    

  A strong IR team adds value to the company. IR is an Intelligence agent who has identified the hot-button issues investors care about. IR in India is at a very nascent stage.