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Avoid Shareholder Activism By Improving Investor Engagement

improving investor engagement

With fewer and fewer shareholders attending the annual meeting with each passing year, it’s time we update how to handle investor relations. But this isn’t a bad thing. In fact, fewer participants at the annual meeting mean shorter meetings, less money spent, and less paperwork to file with the SEC—all of which are beneficial for the company.

Investor engagement has a tendency to scare IR executives with the ever-present threat of shareholder activism, but instead of confusing investors with verbose proxy statements and complicated press releases, being transparent and straightforward with shareholders will lead to less activism. It might seem like the higher ups at the company are losing the upper hand if they disclose more information, but actually, it can lead to better communication and, in turn, less activism. 

How to Avoid Shareholder Activism

Communication. Communication. Communication. Without clear communication between the company and its investors, they are forced to fill in the gaps where information is vague. If you have ever witnessed a rumor spread, you’ll understand how dangerous it is when people add in their own presumed details. Don’t let your investors make up stories!

Honesty is the Best Policy

No one likes getting bad news, and giving it can be even worse; however, investors deserve to know pertinent news—no matter how bad it is. While it might seem easier to brush certain details under the rug, consider how bad it will look on the company when that information is discovered weeks later. The only thing worse than sharing bad news is getting caught trying to cover it up.

Quick and Concise

Along with being honest, it’s critical that information is delivered to shareholders clearly and quickly. Whether it’s implementing Plain English into the proxy statement or having an updated website with a “News” section, new information should be readily available for shareholders to learn on a consistent basis.

Methods

While it is stressful to keep shareholders informed with company updates, there are tools and resources you can use to ensure optimal engagement. Events such as IR conferences and analyst days are great opportunities to keep investors in the loop. Want to make sure you’re making the most out of your company’s investor relations? We’ve made a guide for you! Click on the image below to get your free checklist for improving investor engagement.  

Investor relations is a dance between keeping the company and its shareholders informed and engaged. With the ever-present threat of shareholder activism, it’s easy to lose sight of that balance between what is and isn’t pertinent for stockholders to know. Make sure to download our checklist to better organize your IR efforts.

Download FREE Checklist Now