Main objectives of Investor Relations

The Brazilian capital market has been expanding, with an increase in the number of companies listed on the Brazilian Stock Exchange (B3) and a growing participation of both Brazilian and international investors, whether institutional or individuals, with growth in the progress of financial education in Brazil, creating a rising demand for IR professionals to manage communication between companies and investors.

Investor Relations professionals play a crucial role in communicating the financial health and strategy of a company to investors while cultivating relationships that influence the company’s perception in financial markets. Their ability to be transparent, communicate effectively, and stay updated on regulations and market trends is vital for success in this role.

Objectives

Investor Relations has a key role in ensuring solid and assertive communication between companies and the capital market, acting as the organization’s spokesperson.

Some key objectives of Investor Relations within a company are:

• Market relationship: One of the primary objectives of Investor Relations is to maintain relationships with regulatory bodies, over-the-counter markets, stock exchanges, and market entities and institutions.
• Managing investor expectations: Keeping investors informed helps maintain the company’s reputation. Investor Relations works to clearly communicate results and future prospects, minimizing risks and reducing stock price volatility.
• Relationship with the media: Maintaining a relationship with the media is crucial for the disclosure of relevant information. This is important for ensuring transparency and allows for fair distribution of information across all channels.
• Meetings: Public meetings are mandatory at least once a year for companies listed on special segments of BM&FBOVESPA and recommended for other listed companies. The goal of IR is to ensure that these meetings are conducted as effectively and rigorously as possible to reach a large and diverse audience.
• Increasing stock liquidity: Investor Relations aims to promote investor participation in the market, significantly increasing the volume of stock trading.
• Disclosure of results and relevant information: One of the most important objectives of Investor Relations is to disclose the company’s information. Such information includes the earnings release is not an obligation but it is extremely useful to understand the company’s results. The Notices to the Market and Material Facts are classified by the Brazilian Securities and Exchange Commission (CVM) as occasional periodic information and do not have a pre-established frequency, in addition to conference calls and other means of disclosure.

Relationship with the market

Investor Relations is the company’s face within the capital market. All relationships are managed through IR, which strives to build and maintain strong and beneficial connections for both parties.

The purpose is to ensure that good governance aligns the interests of all stakeholders and enhances the company’s image in the market.

Managing investor expectations

The relationship with investors must be transparent and accurate. IR professionals must have a solid financial understanding and be able to interpret and analyze data to explain it comprehensibly to investors. This involves not only calculating but also translating the numbers into clear narratives.

It’s important to understand not only financial aspects but also the specific trends and challenges of the sector in which the company operates. This helps contextualize financial results, anticipate investor concerns, and demonstrate credibility and transparency, proving the skills of both the IR professional and team.

Relationship with the media

As key aspect of the responsibilities and objectives of the Investor Relations department, the relationship with the media requires the team to work closely and develop strategic plans with the press office, corporate communications, and marketing.

The disclosure of information must adhere to legal requirements and the rules established by Regulatory Bodies.

It is important to establish transparency and open dialogue to maintain a quality relationship. This ensures that all information is fairly distributed across all channels.

Meetings 

Meetings serve as a means of disclosing necessary information and as a point of contact between the capital market and the company.

With the growing market and increasing investor interest, the number of meetings and participants in these events has increased.

Some meetings are mandatory, while others are not, and they can take place several times a year depending on the criteria established by IR, with the goal of reaching an ever-growing and diverse audience.

• Public meetings: Public meetings are often well-attended due to the presence of new companies and public stock offerings. They tend to be more dynamic and often include visits to facilities such as stores and distribution centers. Public meetings provide opportunities for investors and analysts to directly question IR professionals and other company executives about the details of the information being disclosed. These meetings must follow Codim guidelines.
• Individual meetings: Individual or restricted meetings are held privately with analysts, fund managers, or investors. These meetings are essential as they offer the opportunity for more agile dialogue.

Earning Releases and relevant information

The disclosure of relevant information is essential within Investor Relations. The disclosure of accurate and timely financial reports is one of the most important obligations. This includes quarterly reports, annual reports, and other regulatory documents required by authorities and supervisory bodies.

• Earnings releases: Although not mandatory, earnings releases are crucial for the market to understand the company’s results. They are usually published every quarter, accompanied by quarterly information (ITR) and complete annual financial statements (DFP).
• Conference calls: Conference calls, as the name implies, are conferences held via telephone (or online, with webcasts, slideshows, etc.). It is an effective communication tool that should prioritize punctuality, fairness, and transparency in information sharing.
• Notices to the Market and Material Facts: These serve to inform the market of specific information that the company wishes to make public. They do not have a defined frequency and can be posted whenever the IR team deems it necessary.

Conclusion

The Investor Relations market in Brazil has significantly evolved over the past few decades in response to the growth of the capital market and the need for transparency among Brazilian companies.

This market is continuously evolving, and Investor Relations professionals in Brazil play a crucial role in supporting the relationship between companies and their investors, ensuring that financial information is accurately disclosed, in compliance with regulations imposed by the Brazilian Securities and Exchange Commission (CVM).

It is essential to understand the objectives of Investor Relations to create a disclosure strategy and strategic plans, positioning your company at the top of the capital market.