Investor Relations

IntroductionAll things being equal, the quality of Investor Relations (IR) is a keycompetitive differentiator that can result in higher valuation.This is not only my firm belief, it has also been my experience after morethan 20 years of practice in Investor Relations, both in-house and as anexternal advisor to public as well as private companies around the globe, ofall sizes and sectors.Traditionally, the key principle of Investor Relations is to help promotethe securities issued by publicly traded companies—shares, bonds, or hybridproducts—in compliance with regulations, with a particular emphasis onproviding everyone with equal access to information. Precisely, all playersin financial markets should, therefore, have enough information to assessthe fair value of these securities.The world of Investor Relations and of financial communications is constantlychanging, because of technology, regulation, and globalization. Theinformation content is expanding much beyond the presentation of financialstatements. Nonaccounting factors like patents, commercial successes,market shares, and management’s reputation now carry as much weight indetermining the value of a company as the quality of its financial performance.Lawmakers are increasingly requiring that companies detail theirmanagement compensation, corporate governance, and sustainable developmentpolicies. Accounting standards are also likely to evolve further,maybe even converge.In this context, Investor Relations is not only a multifaceted discipline,but also a major corporate responsibility in generating trust. As such,Investor Relations is a strategic lever for corporate development becauseof its influence on the cost of capital—share prices and credit ratings—andon reputation. This is why I am convinced that Investor Relations deserves“a seat at the table” and needs to be fully integrated with the company’scommunications framework and strategy.xi