Taking it to heart
Exploring how investor relations is organized in companies pre and post IPO
EY, with IR Insights, surveyed 876 investor relations professionals from around the world to get to the heart of investor relations.
Investor relations (IR) is as vital for companies preparing for an initial public offering (IPO) as it is for those already listed. For companies getting ready for an IPO, financial communication is critical. A listed company, on the other hand, may need to improve its IR function to support the low cost of capital and a higher share of liquidity in relation to its peer group, and also to mitigate risks in financial communication.
In our latest survey we asked IR professionals about the organization and the structure of the internal IR functions, their connection to the board and key departments, and what aspects are important to the IR practice and for its assessment.
- Interdepartmental connectivity is vital to the good internal organization of the IR practice, and most important is the cooperation with the accounting and finance department.
- IR has a seat at the top table: 77% of companies of all sizes have an IR representative attending board meetings and 83% provide a written IR report to the directors. The top subject for discussion is market sentiment and investor activity, either at the board meeting or in a report.
- A written IR strategy and manual support better preparation for an IPO and help ensure regulatory compliance post IPO. With the growing importance of financial communication, IR is also part of internal audits: 32% of companies globally audit their IR function.
We hope these inferences — and the regional and market capitalization-specific findings we've covered in this report — help you better understand and manage your IR functions.
We are happy to share further information and insight on request with companies preparing to list and also with those already established on the public markets.