A dynamic role combining finance, communication, and marketing
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Investor relations (IR) combines finance, communication, and marketing to effectively control the flow of information between a public company, its investors, and the company’s financial community rather than its business customers or the general public. The IR function helps release information, handle inquiries and meetings, and provide management and crisis management feedback.
Communication is also a two-way street; the IR department is responsible for forwarding significant company stakeholders’ input to management. During times of crisis (financial or otherwise), the IR department will advise management to preserve the company’s relationship with its investors and mitigate any damage to share prices.
Working in Investor Relations
Organizationally usually part of the public relations department, IR acts as a portal through which investors and company executives communicate. Investors, analysts, and anyone else with a request or a demand for information from a company are usually funneled to the IR department.
IR also acts as a translator for the language that Wall Street speaks. IR works to relay what the investor community may see as assets and flaws, what they want to be changed, what they don’t understand, and what will drive the value of shares based on current and predicted investor demands.
In 2002, the Sarbanes-Oxley Act was passed, a regulation that drastically increased how much and how often publicly traded companies were required to report financial and trading information. The Act has made the role a robust and efficient IR plays in today’s corporate environment an absolute necessity.
A Typical Day in Investor Relations
Your day starts by analyzing a mix of internally-sourced data and industry trends found by third-party analysts as background research for an upcoming presentation. While you explore the data, you are thinking about the best way to visualize the data so that critical messages are communicated most appropriately.
Next is a meeting with the finance team responsible for creating financial models for your company’s share price. The objective is to create a story from the numbers and turn the data into information that can be populated in the corporate investor relations presentation.
You attend a lunch being hosted for key shareholders of your company. The CEO and the CFO are presenting to this critical stakeholder group, and you have previously spent time writing their speaking notes. Your role is to support the CEO and CFO and to respond to questions among the people in attendance.
You have some time in the afternoon to start the presentation you were working on in the morning. However, you are interrupted to attend a meeting with senior business leaders. They have been informed that a significant competitor is about to give an unscheduled announcement after the close of the market later that day, usually signaling bad news. You have been asked to listen and be prepared to issue a response immediately after to reassure potentially jittery investors.
You spend the rest of the day reviewing the financials of the competitor, so you have the necessary background information to craft your response quickly. You work late that night, reading the after-market statement. You draft your response and send it to the CFO, who greenlights it. You send it to your financial market news contacts for them to publish and your internal team to publish on your company’s website.
Qualifications and Experience for Investor Relations
IR roles usually require a bachelor’s degree in finance, accounting, communications, economics, or related fields. A master’s degree (such as an MBA) is not necessary but is usually considered an asset.
There are relatively few entry-level positions in IR. Companies usually require anywhere from two to seven years of work experience where the applicant has gained expertise in investor relations, public relations, financial investment, accounting, legal, and other fields.
These experiences are strongly preferred to be with a publicly traded company that operates under the regulatory framework regarding investor information disclosure laws. Experience within the same industry as the hiring company is also a plus.
Required Skills for Investor Relations
Working in IR requires extremely effective communication (verbal, written, and graphic) skills and the ability to develop and maintain business relationships. A strong understanding of financial reports, analytic methods, and financial data tools is often required. Due to the large amounts of data to be processed and presented, applicants should have intermediate-high proficiency with the MS Office Suite, particularly Word, Excel, Access, and PowerPoint, as well as the ERP software of choice used by the company.
Compensation and Career Development in Investor Relations
Compensation for IR professionals varies depending on industry and company size. Generally, mid-size companies offer lower compensation than large private equity firms. Entry-level IR analysts can expect to earn a salary between that of a public relations specialist and a financial analyst, with salaries ranging from moderate to high. Experienced IR professionals can earn salaries similar to those of top executives in other areas of the company. IR managers in large organizations are among the highest-paid professionals, with compensation levels reflecting their significant responsibilities and the level of experience and expertise required for this role.
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