IR is an important part of running a successful business.

Communication of any company is a holistic process. The information that is communicated to investors can entail certain consequences for the company’s relationship with officials, employees, and consumers. To take into account all the communication tasks facing the company, and there are relations with investors, or Investor Relations.

History of occurrence

The concept of “investor relations” was first formulated by Ralph Cordiner (General Electric) in 1953. The first IR-services distributed financial information about the company, press releases on annual reports and financial results. In 1969, the National Institute for Investor Relations (USA) was created - the first professional association. Later, similar organizations appeared in Western Europe, which in 2008 formed the Global IR Network (GIRN).

What is IR in the modern sense?

Investor relations is a company’s field of activity located at the intersection of finance, communications, law and marketing. The purpose of IR is to build an effective two-way communication link between the organization and the investment community that really affects, or can potentially affect, the assessment of the market value of the company. Quite often, the same name defines the department in the company, which is engaged in maintaining communication with investors.

IR is primarily the use of public communications and information channels to get the necessary reaction from shareholders or investors, namely increasing their interest in the securities of a particular issuer.

To whom and why are Investor Relations needed

Who and how can apply IR in their activities?

1. Public companies whose capital increase is directly dependent on public relations.
2. New issuers to successfully place securities.
3. Companies that attract financial flows through public or private offerings to increase capital inflows.
4. Initiators of new business who attract financing with limited recourse to make the project take place.
5. Credit borrowers to lower the cost of a loan.
6. Buyers and sellers of a business to get better deal conditions.
7. Banks, insurance companies and other investment retailers to have a competitive advantage.
8. Builders to attract investors.

Investor Relations in Russia

In the countries of the former Soviet Union, including the Russian Federation, IR is a fairly young business area that is in the process of formation. But since life does not stand still, the specialists of modern companies have to master new competencies, in particular the establishment and maintenance of communication ties. A large number of special educational programs have been created to train highly qualified personnel in this area.

Most of the significant players in the European market of financial communications and IR are operating today in the domestic space, but not all of them have their representative offices here. There are practically no American communications consultants in the Russian market. As for domestic companies operating in this field of activity, there are not too many of them, but in the near future their number will increase significantly.

Some companies are trying to get into the market of investment and financial communications. However, IR is an activity that requires complete immersion. Successful transaction support requires synchronization of international and national communication activity, a deep awareness of the special aspects of domestic business and overcoming language barriers.