relationship and management
Sat Dec 25, 2021
Investor relations serve as the bridge between the management and the investors. Investors and regulatory requirements today demand much greater transparency. Timely and accurate information is of utmost essence. Investors typically wish to access the following information:
1. Financial Performance
• Top-and bottom-line growth (on a consolidated and standalone basis)
• Segmental information
• Historical performance to assess future growth potential.
2. Corporate Strategy
• Management’s vision and insight on strategic initiatives on growth, expansion, diversification, positioning the company
• Long-term orientation on shareholder value
• Creativity and differentiation
• Alignment with market trends
3. The company dynamics
• How does the company make money?
• What is the logic behind the business model?
• What is the competitive edge?
• What are the long-term value drivers
• What steps and strategies have been adopted or contemplated by the company to assess and mitigate risks?
4. Management Quality
• How well does management execute strategic plans?
• Management credibility and experience in the relevant sector
• Management’s ability to generate sustained earnings.
5. Corporate Governance
• Transparency regarding insider trading
• Performance-based remuneration
• Shareholder structure
• Regulatory compliance, Composition of the board and its committees.
• Regular Reporting and disclosure in accordance with applicable laws
6. Investor Relations
• Transparency of financial information and disclosures
• Availability and openness towards investors community
• Equal importance to communicate good news as well as bad news
• Quantification of strategic objectives and goals
7. Operational Excellence
• Superiority in operations
• Seamless execution of business processes
• Customer satisfaction
• Market positioning
• Industrial reputation
A good investor relations function is absolutely necessary to communicate effectively with investors and to influence their perception on the company. Overall, the job of the IR function is to communicate clearly to investors the strategies behind their growth model and position the company as the 'must own’ investment for the investors.