Investor relations (IR) is “the strategic management responsibility that integrates the disciplines of finance, communications and marketing to achieve an effective two-way flow of information between a public company and the investment community, in order to enable fair and efficient capital markets.”[1]

In scholarly public relations (PR) literature, IR is often identified as “financial public relations”, as a “hybrid of public relations and corporate finance”, as well as “the specialized part of corporate public relations that builds and maintains mutually beneficial relationships with shareholders and others in the financial community.”[2]

Legal Standards

In Canada, communication with a corporation’s financial stakeholders is heavily regulated by provincial and territorial securities laws. Securities Acts establish the minimum amount of information a company must make public in its investment dealings.

The Investment Industry’s Regulatory Organization of Canada (IIROC) is the national organization which oversees all investment dealers and trading activity in Canada. Mandated by the Canadian Securities Administrators (Canada’s provincial and territorial securities regulators), the IIROC sets and enforces regulatory and investment industry standards, while protecting investors and maintaining market integrity and competition.

Ethical Standards

The Canadian Investor Relations Institute (CIRI) is a professional body of IR executives in Canada who are committed to furthering the recognition and development of investor relations in Canada. As part of its mandate, CIRI has an established Code of Ethics that guides members in the ethical practice of IR.

The CIRI Code of Ethics serves as a moral basis for member practitioners, which establishes standards of practice beyond the minimum requirements of openness and transparency required by law. Its framework stipulates that member practitioners adhere to the following ethical standards:

- Uphold the law
- Avoid professional impropriety (*appearance of)
- Be knowledgeable of current legal and regulatory principles
- Maintain confidentiality rules
- Comply with public reporting procedures
- Communicate honestly with publics about corporate information.[3]

IR Scandals

The Bre-X Minerals Ltd. and Enron scandals of recent years, serve as two examples of impropriety in communication with investors and the public, on the part of the two corporations. These two scandals expose the necessity of corporations to communicate honestly and openly, to a higher ethical standard than the minimum required by the law, to their financial publics and the public at large.

Investment Ethics and Corporate Social Responsibility

Many modern corporations are aware that the financial health of their company is related to the perception that they engage in socially responsible activities. More and more, investors are determining where to invest their capital based on their social perception of a corporation.

Socially Responsible Investment (SRI) is the idea that while socially concerned investors pursue the same economic goals as all investors (capital gains, higher income and/or preservation of capital for future needs), they don’t accept that their investments should be used for activities that are socially or physically harmful to the environment.[4]

Socially responsible investors invest in corporations whose philosophy for Corporate Social Responsibility aligns with their individual ethical values. In a pluralistic society, it is difficult to pinpoint where CSR and SRI align on an investor-to-investor basis. Generally though, ethical investors will avoid companies that damage the environment (nature and people) and favor companies that provide positive goods and services.[5]


SRI and CSR have been attacked by opponents on both the left and right. While detractors on the left say that SRI is a cop-out to capitalism, economist Milton Friedman wrote in 1970, that CSR is akin to “pure and unadulterated socialism.”[6]

In Friedman’s view, it is not the purview of the business, but of the individual to engage in the ethical decision of whether or not to finance socially responsible activity. He argued that if a corporate executive was to make expenditures on environmentally friendly activity that was not in the best “financial” interest of the corporation, he would be spending someone else’s money for a general social interest.[7]

“Insofar as his actions in accord with his "social responsi­bility" reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money.”[8]

For Further Reading

Miller, E. (1991). Investor relations. In P. Lesly (Ed.), Lesly's handbook of public relations and communications (4th ed. pp. 164-213). Chicago: Probus Publishing.

External Links

National Investor Relations Institute (NIRI)
Enron Scandal - Wikipedia
  1. ^ Canadian Investor Relations Institute (2009). Retrieved November 11, 2009 from,
  2. ^ Petersen, B. & Martin, H. (1996). CEO perceptions of investor relations as a public relations function: An exploratory study. Journal of Public Relations Research, 8(3), 173-209.
  3. ^ Canadian Investor Relations Institute (2009). Retrieved November 11, 2009 from,
  4. ^ Cooper, R.; Lott, C. & Lowry, R. (2001). Strategy – Socially responsible investing. The Investment FAQ. Retrieved November 11, 2009, from
  5. ^ Ibid.
  6. ^ Friedman, M. (1970). The social responsibility of business is to increase its profits. The New York Times Magazine. Retrieved November 11, 2009, from
  7. ^ Ibid.
  8. ^ Friedman, M. (1970). The social responsibility of business is to increase its profits. The New York Times Magazine. Retrieved November 11, 2009, from, ¶9.