Controller Role in Investor Relations
Objectives of Investor Relations Function
*What is Investor Relations?
A strategic management responsibility required for publicly-traded companies.
Integrates finance, communication, marketing and securities law compliance.
Enables effective two-way communication between a company, its shareholders and the
Contributes to achieving fair valuation for the company.
A form of marketing.
“Provides company information to investors to help them make informed buy and sell decisions.”
and “to enhance shareholder value”
*Why do it?
To raise interest and attract investor funding.
To increase credit ratings and stock price in both Bond market and Stock market.
Communication Vehicles for Investor Relations
Methods to communicate investor related messages:
Annual Report to shareholders
Quarterly Reports to shareholders
Annual Meeting with shareholders
Corporate announcement of special interest to investors:
Investor Relations Message Recipients
*Who uses this message
1. Small investors
2. Security Analyst
3. Bond Holders
Large institutional investors:
3. JP Morgan,
Credit Rating/ Bond rating Agencies:
Standard and Poor
Information Needs of the Financial Analyst
-Management Presentations, Company and Industry comparison analysis, quarterly and
For the analyst: Aid to predict financial performance and determine fair values that is to be
recommended to investors.
For the company: Enables management to directly answer questions from investor group and in
cases, help to answer and explain troublesome events such as found in annual reports.
Presentation Content Requirements Suitable for analyst
To give a sense of an experienced and well qualified management:
CEO and key executives should be present and gives the present talk, discusses market
positioning as to where the company is heading, its present competitors, and management
For providing long term prospects of the company, assigning specific persons specializing in
related field of subjects or line of work to discuss and answer should be allocated.
Status of Market penetration – Head of Marketing
Stategic Planning – Head of Operations
Long term objectives and long range outlook – President
Important research and development – Head of Research
For providing a better picture of financial strength:
Slides and graph presentations detailing Status of Orders, trend of sales.
Balance Sheet and income statement and trends in cash flow in graphs as well as, comparative
analysis ratio performance against rival companies.
Company guidance - Information that a company provides as an indication or estimate of its
future earnings. Guidance is an "expected results" issue from a company to shareholders and
market watchers as to how they envision a future period turning out. Such guidance will
typically include revenue estimates, along with earnings, margins and capital spending
This information can be retrieved by attending Corporate Analyst/Briefing, or can be extracted
from media and Company Broker Agency.
Organizational Structure for Investor Relations
Discussions of a certain financial and technical terms to different investor group should be
unified in terms of idea and as much as possible allocated to proper executives of
1. Multiple executives : Multiple Target Audience – Departmental executives relays
information to different target group of audience.
2. 1 Chief Executive : General Target audience – The highest company executive
answers all query with general knowledge on all departments and all ideas confirmed with
its respective handler.
3. 1 Investor relation unit to shareholder and 1 Investor relation unit to large financial
Role of the Controller and Other Principals
Controller, Chief Financial Officer, Corporate Executive Officer
“What should be the role of the controller?”
Information Resource person – the resource person of financial data by the executives.
An Interpreter – explains to executives the financial reports as well as decipher them to
financial institutions when asked to do so.
A Communicator – relays and present financial information to entitled groups in absence of the
Chief Financial Officer.
A Reviewer – reviews accuracy and completeness of quarterly, annual reports, news releases
and investor relations activity concerning accounting/financials.
Chief Financial Officer
Principal Spokesperson or Contact for Large institutions
Chief Executive Officer
Preside over major meetings with security analysts, large investors, and the like and present
the background and related information on such important matters as:
(a) Company mission, purpose, goals and objectives, and so forth
(b) Competitive position of the company
(c) Major operating accomplishments in recent periods
(d) Direction company is headed
(e) Any forthcoming major events that can be announced (management
changes, acquisitions, divestments, etc.)
Conducts meetings on a 1-1 basis to major investor to discuss item 1 above.
As appropriate in IR meetings, refer financial questions to the vice president of finance or
controller, and certain operating questions to the operating executive present.
For financing matters, meets directly with investment bankers and rating agencies to answer
Address important company matters and the annual meeting of shareholders.
What is Investor Relations?
Two way communication between company and stakeholders to provide company
information and direction.
b. An inquiry request made by stakeholders for personal use.
2. The purpose of (IR) is to raise company value, ratings, and to attract investors for funding?
3. In an article it was reported that Samsung will form venture with Apple in order to develop IEDGE phone. What is this method of (IR).
a. Corporate Announcements and Divestiture.
b. E-business news.
4. For analyst to analyze book value, price earnings and other ratios where should he/she look?
a. Annual/Quarterly Reports for Shareholders disseminated by the company.
b. Business section of Financial Times or Philippine Daily Inquirer.
5. Bond ratings/Credit ratings for companies are issued by:
A. BDO Investment, BPI Invesment Bank.
B. S&P, Reuters, Bloomberg.
6. For effective financial presentation to individual small investors, how should the (IR) executive
present its data.
a. Graphs, Stock charts, table, trend lines.
b. Directly present the annual reports with all the numbers included.
7. Company Guidance is?
a. is an "expected results" issue from a company to shareholders as to financial related
matters is concerned.
b. Is a guideline for the company and its employees to abide to.
8. Marketing Director explains advertising and branding of Samsung to Advertising
representatives, CEO discusses company direction to Top stakeholders? What is the structural
a. Multiple Executives : Multiple Target Audience.
b. 1 Chief Executive : General Target audience.
9. If there’s a Chief Financial Officer and a Controller in a company. Who is the Principal
Communicator and Information for Financial Information? (3pts)
10. A VP of a rival company is proposing a merger with the company. Who is more suitable to
discuss and deal with him? (3pts)
11. In Investor Relations topic, What are the positions being focus on these study?
a. CEO, CFO, Controller
b. CPA, CFA, MBA