Source: Group Finances
Olga Stepanova, an IR specialist and Investor Relations Society diploma
It is common knowledge that the way Investor Relations (IR) operates can directly impact company valuations and investor confidence. A successful IR strategy should primarily focus on building lasting partnerships with actual and potential investors. In doing so a management must bear in mind the following recommendations:
1. An IR specialist must strictly abide by the laws that regulate information disclosure by public companies. When interacting with investors and/or stock market analysts one should be very prudent in statements he/she makes, to make sure unofficial information doesn’t leak. An IR specialist must not disclose his/her company’s confidential information or make forecasts regarding profit margins, revenue, investments planned, etc.
2. An IR specialist should be prepared for ongoing interaction with investors and/or analysts. At talks one is expected to fully answer all questions posed, to avoid any suspicion over possible withholding of data. That said, it’s also important to try to steer clear of any ‘trapping questions’ purposed to fish out confidential information. Facing a situation like that, an IR specialist may safely say he/she is not authorized to enlarge upon the issue involved.
3. Any message on corporate activities must be clear, transparent and unambiguous. An IR specialist must bear in mind that any information about a public company can shape investor decisions and/or influence valuations.
4. If a media source posts distorted or completely false information about a public company, this company’s IR specialist is encouraged to air an official refutation statement on behalf of the top management.
5. An IR specialist is expected to advise the board of directors as to what information may be published on top of a mandatory list of documents determined by law. Ancillary information is aimed at helping analysts and investors better understand the company’s strategy and identify kea factors capable of impacting a stock price. It is essential to note that actual and potential stakeholders expect regular, timely and exhaustive information about all aspects of corporate activity without concealment of a downside.