1.1 Origins

The roots of Investor Relations stretch back a long way. Here’s a brief history.

On 24 January 1609, Isaac Le Maire, a merchant who knew every trick in the book, took up his pen and wrote a sharply worded letter to the Dutch East India Company (VOC), one of the largest trading companies of the 17th and 18th centuries (see Paul Frentrop and Joost Jonkerⁱ). In it, he complained about the miserable corporate governance, the abuse of power by the management, the company’s strategy and the poor treatment of the stockholders. Shareholder activism has been with us for over 400 years. Even today, this form of exerting influence is frequently still cause to strengthen Investor Relations or put them on a new footing.

The same applies for listings for similar reasons.«New stock or bond flotations, upon which an expanding business must depend for its success, can be effected only if the concern has understood how to gain confidence and good will of the general public.» This was written by Edward Bernays in his classic work Propagandaⁱⁱ. Published in 1928, it was one of the first books to describe the fundamentals, meaning and purpose of corporate communication. The recognition that relations not only with investors but also with the wide public should be intensified and professionalized during and after the process of going public has been established for some time.

Origin of the Term

While industrial icon General Electric (GE) had already developed a communication program especially for private investors in 1953, the term “Investor Relations” came to the fore in German-speaking countries only in 1968 with the dissertation by H.K. Hartmann. In Switzerland, Michael Drill produced a systematic review of the topic in a dissertation at the University of St. Gallen in 1995ⁱⁱⁱ. His deliberations remain as topical today as they were back then, which is why credit is given to Drill in several presentations in this handbook. Kristin Köhler chronicled the history of IR in detail and linked it to the professionalization of the job of IR in her book that was published in 2015^iv.