Investing What Is Investor Relations? By Paul Nolan Paul Nolan Facebook Twitter Paul Nolan has more than 20 years of experience writing about investing, assets and markets, business, taxes, retirement planning and accounts, and more. He is also the editor of Sales & Marketing Management, a website that focuses on B2B sales and marketing. Paul received his bachelor's degree in journalism from the University of Northern Colorado. learn about our editorial policies Updated on July 31, 2022 Reviewed by Khadija Khartit Reviewed by Khadija Khartit Twitter Website Khadija Khartit is a strategy, investment, and funding expert, and an educator of fintech and strategic finance in top universities. She has been an investor, entrepreneur, and advisor for more than 25 years. She is a FINRA Series 7, 63, and 66 license holder. learn about our financial review board Fact checked by J.R. Duren Fact checked by J.R. Duren J.R. is a terms editor at The Balance, a role in which he focuses on providing clear answers to common questions about personal finance and small business. J.R. has more than 10 years of experience reporting, writing, and editing. As an editor for The Balance, he has fact-checked, edited, and assigned hundreds of articles. learn about our editorial policies Share Tweet Pin Email In This Article View All In This Article Definition and Example of Investor Relations How Investor Relations Works Notable Happenings What It Means for Individual Investors Definition Investor relations (commonly abbreviated as "IR") is a division of a publicly-traded company that focuses on communicating with institutional and individual investors, members of the financial community such as stock analysts and investment banks, and government agencies. Photo: Blue Images / Getty Images Definition and Example of Investor Relations Investor relations is the department within a company that’s responsible for communicating with the investment world, which includes those who have invested in the company individually or institutionally, as well as investment analysts and government agencies. For example, Nike’s investor relations department shares insights on its corporate governance guidelines, board candidate requirements, sustainability efforts, and broader social goals on its IR page. Microsoft, Alphabet, Amazon, and many other companies do the same. Key Takeaways The role of investor relations within a company is to provide information regarding a company’s past performance, future growth strategies, corporate policies, and to respond to corporate events that could impact share value.IR departments have increased in importance over the last two decades because new laws have increased transparency of corporate governance and large, activist investors have demanded the same.An IR department must work closely with several different components of a company, including corporate executives, public relations, and legal oversight.The increased emphasis on IR benefits individual investors by making information on past performance, future strategies, and other corporate thinking more accessible. How Investor Relations Works Companies typically develop an IR team prior to an initial public offering (IPO). A primary role of an IR representative is to address investor concerns, from the IPO through the various stages of a company’s growth, to help build the company’s image and maximize its share price. IR responsibilities include: Represent the company at investor presentations and meetings, as well as with mediaProvide information on company performance in a timely fashionProvide non-financial information that addresses investor questions regarding corporate governance and overall missionProvide regular reporting to the board of directorsCommunicate investor concerns to company executivesProvide a fair business valuation for the companyCollect, report, and address questions and feedback from investorsInstill and inspire investor confidence in the long-term future of the company despite any negative news that might occur In general, IR departments communicate with the investing community through a variety of means, including social media, press releases, conference calls, roadshows, and websites. Because the IR team interacts with a number of departments within a company, it must have clear lines of communication with each. This includes the CEO, chief financial officer, public relations department, and various product divisions. While IR is a different department than media relations (IR focuses on the investing universe, not the general public), the two may work together for news releases. For example, when Peloton announced in February 2022 that co-founder John Foley would step down as CEO, a position he has held since the company was formed, the company’s IR team was the first point of contact listed in the company’s press release, and the release was posted in the IR section of the Peloton website. Note Depending on the size of a company, an IR department may be one person or a team of employees. Notable Happenings Instilling investor confidence in the long-term future of a company with correct, accurate, and complete information about the company, is a primary function of IR teams. That role became significantly more important with the passing of the Public Company Accounting Reform and Investor Protection Act of 2002 (PCARIPA). They are held accountable for it given the high stakes associated with it. Corporate scandals that occurred over the past two decades, including the collapse of Enron, Corp. in the early 2000s, led lawmakers to institute more stringent oversight and financial reporting requirements via the Public Company Accounting Reform and Investor Protection Act of 2002. The legislation strengthened the independence and financial literacy of corporate boards while also holding the CEO and CFO responsible for the accuracy of the information conveyed and communicated to investors via the IR team. The Sarbanes-Oxley Act increased the importance of investor relations. IR practitioners must be knowledgeable of legal requirements and help management meet these requirements. What It Means for Individual Investors An IR team helps you become more informed about key areas such as big changes that may affect stock prices and quarterly financial reports. Because IR departments have become more important over the years, individual investors who are researching investment opportunities should be able to easily access information on a company’s past performance, future plans for growth, and responses to any corporate events that made headlines. Getting more information is usually better when making investment decisions. IR teams make that possible. Note Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Nike, Inc. “Investor Relations.” Boston University College of Communication. “Investor Relations 101: A Broad View of IR.” Peloton. “Peloton Announces Leadership Transitions To Position Peloton for Sustainable Growth, Profitability, and Long-Term Success.” Marquee Equity. “The Role of Investor Relations–Importance of the IR Department.” Congress.gov. “S.2673—Public Company Accounting Reform and Investor Protection Act of 2002.” SAGE Publications. “The SAGE Handbook of Public Relations,“ Page 613.