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Investor relations (IR) best practice
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In response to member requests for guidance in the area of IR best practice, the International IR Federation has established
a set of guidelines for practitioners and consultants. The IIRF is grateful to its member societies for their contribution to these
guidelines and would particularly wish to thank AIRA in Australia, NIRI in the US, the IRS in the UK and CLIFF in France.
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These guidelines are not prescriptive and may require adaptation for our member societies requirements, and they cover the following:
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- Definition of IR
- Role of the investor relations officer (IRO)
- Role of the IR consultant
- Relevance of internationalisation / globalisation
- Key competencies of an IRO
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Definition of IR:
IR - -
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- is a strategic management responsibility
- integrates finance, communication, marketing and securities law compliance
- enables the most effective two-way communication between an issuer, the financial community, and other constituencies
- ultimately contributes to a company's securities achieving fair valuation
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Definition of the IR process:
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IR is the communication of the relevant and necessary information by which the investment community can consistently make an informed
judgment about the fair value of a company’s shares and securities.
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The IRO should be responsible for:
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- developing an effective two-way communication process between a listed entity and the financial community
- working in accordance with the regulatory regime(s) governing financial markets both domestically and internationally
- managing the dissemination of financial, strategic and legal information
- stakeholders, including existing and potential institutional and retail investors, financial analysts, stockbrokers,
regulatory bodies and the financial media
- communication with international as well as domestic shareholders
Communication should be carried out to ensure that:
- all investors have the information necessary to enable them to become fully and fairly informed about all material information,
enabling them to make reasonable investment decisions
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An IR consultant may be responsible for:
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- providing knowledge, advice or support in all areas normally associated with investor relations
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Key competencies of an IRO
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- communication skills
- investment/financial markets understanding – debt and equity
- analytical skills – to interpret, analyse and discuss all financial and non financial aspects of organisation
- strategic thinking – to communicate past, present and strategic directions of the company
- understanding of operations – particularly business drivers
- relationship building – with the investment community
- sound commercial judgement – ability to build confidence of investors and senior management
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More information
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The IIRF has also been asked to provide a code of ethics in IR. Many of our member societies already have such codes
and we advise our members to consider the following:
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