|Companies should devise an effective investor relations policy to regularly convey pertinent information to shareholders. In disclosing information, companies should be as descriptive, detailed and forthcoming as possible, and avoid boilerplate disclosures.|
This Guideline describes the need for an effective investor relations policy.
The company needs to convey relevant information to shareholders, particularly those that might impact its share price and value. This Guideline indicates that this should be achieved through an effective investor relations policy and process.
The term, “investor relations” generally refers to the formalised means by which companies communicate information, usually of a financial nature, to the investment community. Such communication is meant to help investors gain a full appreciation of the company’s business activities, strategy, and prospects and, consequently, allow the market to make an informed judgement about the fair value and appropriate ownership of a company.
An effective investor relations policy not only needs to have such a scope and objective, it should also be backed up by the appropriate resources and mechanisms by which it can be implemented. Usually, this requires that companies have an investor relations department, or outsources the investor relations function to a specialist firm.
The Guideline goes further to require that the information which companies disclose should be as descriptive, detailed and forthcoming as possible, and avoid boilerplate disclosures. This is to avoid a common pitfall of companies seeking to play it safe by using standard or recycled text, rather than making meaningful disclosures that can truly help investors make an informed decision when trading in the company shares.
B. SGX Disclosure Guide
C. Related Rules and Regulations
D. CG Guides
- Board Guide 4.9: Investor Relations [Board Duties].
- Board Guide 7.2: Shareholders [Stakeholder Engagement].
E. Related Articles
- “Shareholder activism and how directors can respond” by Jerry Koh. (97KB)
- “Effective shareholders' communications” by Daniel or Lay Huat. (118KB)
- “Engagement with shareholders” by Mike Gray. (88KB)