Investor relations (IR) deal with relations between company and investors. Their importance and goals are much wider than only to establish and maintain the channel of bilateral communication with financial market, but also to create a kind of dialogue. At present, investor relations are one of the standards in public company functioning.
Paradoxically, the new era of modern IR was started by the Enron case. Resulting from the crisis connected with Enron, IR were rebuilt and developed and, it can be concluded, they consistently gain importance. Of course, Enron did not create that change but quickened the changes which were already slowly happening in IR activity. The task to regain trust in financial market after the Enron case was given to IR departments.
Also financial market participants formulate new expectations towards companies’ IR – as a tool to reduce the level of financial investment systematic and specific risk. The risk reduction results from giving the market participants access to complete information about a situation inside company and company’s environment (in the management opinion). It is clear that information value and the level of acceptance for company management are on investors and market analysts, apart. That form of IR activity dedicated to stakeholders is worldwide accepted and is developing. In effect, IR enter a new stage: a tool for active and open informing about current company value and its perspective.
But now, companies are observed to be looking for even wider and more active formula for IR framework. In that newly crystallizing formula, IR are being converted into non-financial asset generating company value as e.g. know-how. So, IR are evolving from a tool which informs about company value into company value generator.
The aim of the elaboration is to draw attention to selected aspects of the investor relations from the macroeconomic and microeconomic point of view. Also, the aim of investor relations activities was formulated on the basis of Boston Consulting Group matrix concept.
Data / Methods
In the article, comparison method, case study and questionnaire method were used.
Also, a few surveys were conducted by the author on the sample of individual investors, stock-quoted companies and sell-side analysts on Polish capital market between June 2009 – March 2010.
The surveys were created, ordered and supervised by the Author and based on questionnaire method. The PASW Statistics software has been used for data analysis.
Results
The results can be useful to increase the quality of communication with investors in the global financial market.