Saturday, 12 January 2019

How To Improve Shareholder Communications

By Linda Russell


If one manages a big corporation, then he definitely will not be able to ignore the presence of big time investors and shareholders who will participate in company policy crafting. Of course, with all the shareholders present, it is not surprising if there would be some tension between the big number of investors and the board of directors. It is up to the board, specifically the corporate secretary to establish proper shareholder communications to ease the tension.

For those in charge of handling shareholders, the first thing that one has to do is ensure transparency. In order to do this, one has to be able to identify all the shareholders to the board of directors, just for the sake of transparency. After all, shareholders will already be able to know who the board of directors are, so it is only fair that the board of directors have the same information.

Now, do take note that not all shareholders have voting power. There are investors that are just there to earn money and do not really participate in the direct management of the company. So in order to have a clearer and more united vision, one has to talk to the voting shareholders and unify them with the existing management and board of directors.

Now, when bringing all the voting shareholders in the room, one must make sure that all of them have the same direction and vision. As mentioned, there are some investors that have more voting power than others. As a board member though, one should not only listen to the investors with the most holdings, rather listen to all valid concerns and solutions that come with them.

Now, most of the board members would usually butter up to the investors with the bigger shares. However, this will not help fix the company since it is possible that the one with less shares has more insight. In order to be fair, one has to make sure that he or she listens to the concerns of all investors and sit them down for a compromise.

As mentioned above, an agenda has to be set so that all of the shareholders are on the same page. Now, when crafting the agenda, the corporate secretary has to very specific about the problems that have to be tackled so that the meeting does not deviate into something outside of the specified topics. As continuously mentioned above as well, tackle all the concerns of each investor related to the agenda.

Sometimes though, one may not be able to control the shareholders on his or her own. With that, one can seek the help of a proxy advisor. What the proxy advisor will do is he or she will analyze the shareholders based on their individual profiles and also analyze voting so that one will know what moves to make regarding communications among shareholders.

Managing shareholders is definitely a tough job but someone has to do it. In order to bring the company forward, communication is very crucial. As long as the lines to communication remain clear, then there should be no problem.




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