Investor relations is a function synonymous to listed companies communication towards the market participants. It is THE KEY element driving a company’s business communications strategy.

Usually an initiative at the part of a public listed company, IR departments work to communicate with investors, shareholders, government organizations, and the overall financial community.

IR ensures that a company's publicly traded stock is being fairly traded through the dissemination of key information, primarily to allow private and institutional investors to determine whether a company is a good investment for their needs.

As Stock Price reflects expectations of future returns on capital employed and Lack of information creates uncertainty and a discount to stock price, it is essential that the investors & financial community that largely influence stock price movement should be kept informed.

Thus, IR function facilities;

ü  Direct means to inform existing and potential investors

ü  Essential communications function for a publicly traded company to:   - Educate investment community - Shape investor protection

ü  And also to provide Indirect means to impact shareholder value

A good IR strategy is directly propitious to company’s stock price, since;

• Intangibles

-           Enhances shareholder value

-           Support fair valuation of common stock

-           Minimize stock price risk due to uncertainty over performance

-           Shape / enhance perception of company commitment to growth

• Tangibles

-           Maximize analyst coverage (Sell and buy side)

-           Develop / maintain balanced investor base

-           Target financial institutions (Domestic/ international)

-           Track stock valuation

IR acts as a portal, a passage through which investors and company executives communicate, and the first role of an IR function is to create channels of communication for a triage of;

Ideally, an IRO (Investor Relation Officer) represents the function that is central to the communication flow;

IR Success Checklist

ü  Develop IR Compliance (under CMA/MSX disclosure guidelines)

ü  Create an Online presence (Keep web space active and relevant)

ü  Plan periodic interactive sessions/events (Check CMA IR Interaction Circular, link: …...)

ü  Identify Company Spokesperson (s) to inform public on (Financial / Business / product issues) as per MSX IR Circular, Link:

ü  CEO commitment, Involvement and support to open, consistent, credible communication are a must

ü  Sense of urgency from senior management

ü  Consistent and credible public reporting & communications

ü  Clearly articulated, credible business strategies

ü  Articulate, creative vision of the future

ü  Open discussion of financial results & expectations

ü  Regular & frequent contact with investment community

ü  IR backup through pro-active, creative, strategic communications strategy