Shareholder engagement: why it matters

Here’s why you should harness the voice of your shareholder base

The landscape of shareholder relations is changing, as increasing numbers of investors ask more from the organizations in which they invest.

In 2021, more shareholders have attended AGMs than ever before- demanding that their voices be heard, and that they are actively included in key decisions. Amongst some Issuers and regulatory bodies however, there’s a tension between the desire to digitize and a fear over the medium’s ability to platform unwanted activism or distort due process.

Whilst security should always be a central concern for all organization, harnessing shareholder voice should be of the upmost importance to both boards and businesses— here’s why.

We have seen a meteoric rise in shareholder engagement as the total number of investors attending AGMs spiked at 180,000 this year (correct as of July 2021) from a low of 23,000 in 2020 (December). The rise of hybrid meetings has actively facilitated this change, as more investors are brought in from the cold thanks to major improvements to accessibility. The addition of a digital element diminishes the difficulties of attending a specific location at a specific time, and instead opens an AGM up to a global shareholder base.

At Lumi, we have seen our clients unlock major reputational gains when they switch to a hybrid meeting. Often, organizations are better able to move forward with the consent of their shareholder base, improve voting outcomes and secure key business decisions. In particular, harnessing the voices of retail shareholders is critical to the success of your organization. Not only can retail shareholders help futureproof your organization against reputational damage and enhance decision making, any dissent from this subset of your stakeholder base can provide directors with a window into the mindset of your customers at large.

It has long been established that retail shareholders have more affinity towards the companies in which they invest than their institutional counterparts- not least because organizations are cherrypicked by the individuals themselves as a result of a particular affinity or brand alignment. As such, large organizations particularly can utilize the AGM as an opportunity to test and pitch ideas, brand strategy and mission and vision to a captive audience, without risking the external scrutiny of a soft launch or media release.

The adoption of hybrid and virtual meeting technologies has helped organizations enfranchise shareholders from all over the world. Although greater numbers of attendance may initiate fleeting concerns over activism, galvanising shareholder voice can offer a good temperature check and reset for organizations looking to future proof or innovate. Particularly for those organizations with a sprawling shareholder base, hybrid and virtual AGMs— with high levels of shareholders in attendance— provide organizations with opportunities to sense-check potential innovations on a warm audience base, and access to real-time feedback and sentiment on possible policies.

Are you ready to unlock meaningful shareholder engagement? Discover how a hybrid meeting can upgrade your investor relations.

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.