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Engaging with retail investors- here's why it matters.


Retail shareholder engagement is booming; this is largely down to the growing interest in ESG issues amongst investors. The intensified focus on diversity and inclusion campaigns, as well as the climate crisis, has meant that shareholders are requesting more transparency from organizations.

So how can governance and investor relation teams help their companies engage fully with their retail investors?

A panel of professionals recently sat down to discuss this topic in detail; Andre Cinq-Mars, Managing Director of Lumi Canada, Ross Jefferies, Deputy General Counsel and Corporate Secretary at Bank of America Corporation and Andrew Kramer, Vice President of Investor Relations at iRobot Corporation. Successful investor engagement is achieved by forming strong relationships between the company and shareholder, as a result of meaningful interaction and two-way communication between both parties. For shareholders to discover content that will help them better understand the organization, Andrew Kramer stressed the value of having an investor-friendly website, that is easy to navigate, enabling shareholders to spend as much or as little time as they would like toggling from subject to subject.

Ease of use should be prioritized due to the vast differences in technical ability of shareholders: some may be proficient investors, and some may be much less experienced. Making information easily accessible can be instrumental in nurturing a more informed and educated shareholder base, capable of discussing business matters in a meaningful way during the course of the AGM. To compound the benefits of an accessible website, relationships with shareholders can be further strengthened by nurture activity that keeps the shareholder in the loop both before and after the AGM. This helps stakeholders develop a rapport with the business, and feel integrated into the organization.

A joined-up communications program can be achieved by having informative webpages, where participants can download documents ahead of time, and ask questions before and after the AGM. For instance, Bank of America have developed a microsite devoted to the Annual Meeting, where talking-head videos of the directors are shared to make the AGM experience more personal, as well as releasing ESG-related publications, which are more geared to the vocabulary and experience of retail shareholders.

Lumi’s Managing Director of Canada, Andre Cinq-Mars, spoke on how developing a shared platform creates a ‘comfort zone’ for shareholders and directors by ensuring that everyone is at the same level, technology-wise, and can participate in the same way. Additionally, Andre emphasised the importance of working closely with the Investor Relations teams and executives, in order to have the correct information and a joined-up strategy to engage the shareholders.

How can I increase affinity amongst retail investors towards my AGM?

Incentives are a great motivation for shareholders to engage within the AGM. For example, Bank of America made a $1 donation to a particular charity for every account that votes. The major increase in participation at this particular AGM, especially from smaller accounts, demonstrates how positively shareholders have responded to this method. A similar concept has been implemented at iRobot, where the shareholder relations teams a recently launched a program that provides incentives, discounts, promotions and experiences to eligible shareholders. This sort of tactic can help with engagement and identification of engaged stakeholders, due to the increase in visibility of the specific shareholder relationships, through the claiming of rewards and purchasing certain products or stock.

Social media can also be a very telling tool in capturing and observing retail shareholder thought, providing your organization with an unfiltered view of how your investors perceive your business. Social media platforms are also helpful in delivering and promoting ESG content, to show awareness and understanding from the company perspective, as well as presenting other programs and benefits espoused by the organization.

Technology can be a great facilitator for promoting the quality relationships between shareholder and organization. Whilst the pandemic was a catalyst for many businesses adopting virtual meeting formats, remote meeting technologies have the potential to transform investor relations, and for many forward thinking organizations, they are already beginning to pay dividends in shareholder engagement. Through increased engagement from investors, with simple technology and an informed shareholder base, we can predict that this trend of attending online meetings versus in-person will continue beyond COVID-19.

Will your organization integrate any of these strategies into your shareholder engagement plans?

Lumi is the leading digital platform facilitating in-room, hybrid and virtual AGMs for the world’s largest corporations and membership organizations. It is the only platform that digitizes the entire lifecycle of an AGM in a single solution that enables sophisticated meeting facilitation before, during and after the live meeting.