Financial reporting has never been more important than it is today. This has been highlighted by the collapse of Enron and its lack of accurate financial information provided to the investing public and its employees.

Effective financial public relations is necessary to develop and maintain investor confidence. Relationships with the financial community are developed by strategically planning investor relations.

Well-planned financial relations programs help lower the cost of capital for businesses. To meet the legal guidelines of the SEC the company must provide prompt disclosure of corporate news that is significant to the financial community. But the corporation should go far beyond the minimum requirements. Good investor relations can help a company deal with hostile takeover attempts through tender offers or a proxy fight.

New technologies have provided an increasing array of tools for the financial public relations practitioner to communicate with its key audiences such as stockholders, financial analysts, and the financial media. Annual reports and annual stockholder meetings remain important investor relations functions, but additional tools including cable television, the Web, satellite interviews, and e-mail are becoming increasingly essential to have an effective financial relations effort. This effort gives a business increased support for its management, higher stock prices, and greater ease in attracting new capital.