Investor Relations

26INVESTOR RELATIONSpresence on capital markets, and an essential tool for meeting the targets setat the time of the initial public offering (IPO), for instance. These managersrecognize that it is a part of corporate responsibility and a real job requiringhuman and technical resources as well as time. They get involved, openly,in defining, and sometimes driving the Investor Relations program. Theyput high-potential staff in charge of Investor Relations and ensure that theseIROs are closely and directly involved in strategic thinking: Indeed, theyare able to understand that certain decisions involve anticipating marketreactions that IROs alone can predict. They see Investor Relations as aninvestment, returns on which can only be evaluated over time.2.3 THE EFFICIENT INVESTOR RELATIONSORGANIZATIONInvestor Relations is a central and centralizing function within theorganization. It plays a key role in corporate strategy, which in turn helpsdetermine the fair value of the listed company’s shares. As the intermediarybetween the issuer and financial markets, Investor Relations has a decisiveimpact: Its core responsibility is to convey the firm’s identity, establish itsmarket position toward adequate valuation, and contribute to build corporatereputation. The development of the organization’s Investor Relationsstrategy must, therefore, originate from the Investor Relations department(IR department). This department will also be held accountable for designingand implementing measurement techniques.Investor Relations can be described as a two-way street, a dialogue. Inthis respect, it has a lot in common with marketing and with customer–supplier relationship management, as illustrated in the following diagrams(see figures 2.1, 2.2, 2.3, 2.4, and 2.5).The financial market is the first client of the Investor Relations departmentfor information about the company, its various businesses, historical performance,prospects, and strategic directions. In parallel, it is also its leadingClientsClientsFinancialMarketsInvestor RelationsCorporateCommunicationsBoard of DirectorsSupervisory BoardChief Executive OfficerChief Financial OfficerSuppliersSuppliersFigure 2.1 The Investor Relations Relationship Framework