Investor Relations [IR] combine the aspects of marketing, communication, and finance to competently control the flow of information between a company, its stakeholder, and its discerning investors. Scott Tominaga mentions that investor relation has become an extremely crucial aspect of all major large scale companies, no matter the industry they operate in. This includes diverse financial services firms as well, such as banks, credit-card companies, and insurance companies. Investors play a vital role in the growth and success of all such financial services companies, and hence maintaining a strong and relationship with them must be a priority for such firms.

A competent investor relations department should be present in a company, on the basis of its size and scale, as well as the number of investors the business has.  As per Scott Tominaga, the professionals belonging to the IR department shall be responsible for keeping the lines of communication and information open between the business and its investors. The ability of a firm to both attract and retain investors is majorly dependent on the effectiveness of this department.  A systematically formulated, well-crafted, targeted investor relation strategy can successfully transform passive awareness into active investor investment, interest, and support.

According to Scott Tominaga the domain of investor relations has evolved quite dynamically in the last couple of years. The IR departments of modern firms typically have certain important functions to perform, which includes:

• Providing information: Fulfilling the regulatory duty to provide information is among the core duties of an IR department. They provide the investors with accurate, timely, and precise information about diverse aspects of a business. These details are typically related to the financial aspect, including the revenue generation of the company.  The IR department also provides investors with certain nonfinancial data to support company valuations.
• Communication: The IR department of a company is responsible for making sure that a smooth flow of communication is maintained among the firm and its relevant investors. They often act as the middlemen between these two categories, and present investor feedback to company management and the board. In certain cases, the IR manager is also viewed as the ambassador of a company in the capital market.
• Marketing: Maximizing the share prices of a company to develop a positive image of a brand is among the major functions of the IR department. They aid a business in achieving the optimum share price that can efficiently reflect the fundamental value of the firm. However, it is vital to note that there is a difference between using marketing techniques and selling the equity story to approach prospective investors.
• Integrated activities:  The IR department is often considered to be an independent functional unit within a firm, which is in sync with the finance and communications functions of the business, as well as with the corporate governance, and sustainability of the organization.

The vital functions carried out them makes the IR department important to any modern large scale business.