The domain of investor relations has become extremely vital in the modern corporate world, especially over the last couple of years. Scott Tominaga points out that investor relations largely includes factors of marketing, communication, and finance, which are required to be used to control the flow of information between a company, its stakeholders, as well as its investors in a smooth manner. He especially stresses upon the fact that the professionals who currently work at the investor relations department of any company are often considered to the backbone of the firm, as they are the key linking points between the investors and the company. As a result, it becomes their responsibility to provide both accurate and transparent information to various investors, which can ultimately be used for the purpose of defining future investment routes and goals of the firm.
Scott Tominaga discusses the elements that make investor relations vital for all major businesses
Proper funding is vital to the growth and development of any company and these funds invariably comes from the investors. Hence, it is extremely vital for all firms to maintain a positive relationship with their investors. According to Scott Tominaga, the continuation of the operational success of any company is significantly dependent on their investor relations. As a result, it becomes extremely vital to communicate competently with utmost transparency with the investors.
There are several important goals of the investors’ relation department of a company that makes them truly invaluable. Here are a few of those goals as marked by Scott Tominaga:
- They must act as the representative in front of the investors, while simultaneously playing the role of the representative of the investors inside the company. They play such a dual role keeping in mind the concern areas of both the company and the investors.
- They must try their best to help a company to achieve the optimum share price. This shall, in turn, reflect their fundamental valuation.
- They should try their best to provide the needed financial details and information to the various investors in a timely and accurate fashion.
- They must offer any kind of important nonfinancial data that might be needed to support the valuations of the firm.
- They must try their best to carefully observe the rules and regulations of the relevant securities commissions and stock exchanges.
- They must strive towards making sure that the firm does not get involved in aggressive sales promotion or “closing”.
- They should provide feedback about the investors to the company management and the board of directors.
- They should develop a receptive capital market, while focusing on the creation of future financing under favorable terms.
While the professionals working in the department of investor relations have to carry out a variety of important responsibilities, their key duty shall be to take monitor or oversee stock prices movement, acquire vital insights from the management of the company and communicate important information to the investors in a seamless manner.