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How to understand your shareholders

The motivations of shareholders today compared to last year, or even ten years ago, has evolved, just like the world in which they invest in. Gaining a clear understanding of the needs of the variety of shareholders is essential for companies to harness their wants and needs to make better informed decisions.

Who are your shareholders and what do they care about?

We’ve seen a rise of Gen Z investors, with DIY platforms paving the way for a younger generation to enter the investment landscape. 80% of Gen-Z shareholders having already voted in their AGMs, and another 9% say that they have an interest in doing the same. Whether it surrounds sustainability, executive pay, or other ESG considerations, making an impact on wider society is a key priority for shareholders. However, this is not just limited to Gen Z.

Our Shareholder Roadblocks survey revealed that those aged 55+ are the least likely of any age group to want to attend AGMs to influence dividends. It's crucial to break stereotypes that only younger retail investors prioritise having their voices heard when it comes to social impact. That’s why you need to invest time in understanding your shareholders' preferences, their desire for their voices to be heard on specific topics and create space for this.

How to interact with different shareholder groups  

Start by perfecting how you communicate with different audiences, including everyday investors and institutional investors. While these two groups are often put at odds with each other, they share a common desire for information and updates delivered through digital channels. Retail investors are becoming increasingly tech-savvy, and for institutional investors, digital communication ranks as the most crucial means of interaction with companies. Maintaining a proactive approach in keeping shareholders well-informed about meetings and latest updates is essential to making them feel valued and heard, all in the medium they prefer.

Q&A sessions have become essential in shareholder meetings, offering a platform for stakeholders to pose questions, share concerns and suggest ideas. This enables businesses to provide updates on the company's status and engage in open dialogues about important topics. To facilitate such discussions, Lumi provides technology for both in-person and virtual Q&A sessions, ensuring participation from shareholders regardless of their location.

Businesses should also engage with shareholders throughout the year with Investor Relations (IR) events, fostering an ongoing dialogue between the board and investors. This continuous engagement prevents issues from festering and spilling over into critical meetings like the AGM.

Hybrid meetings have proven crucial in broadening participation, offering greater diversity in attendance and engagement by accommodating both in-person and remote attendees.

While a digital-first approach is favoured by many shareholders, maintaining a balance by including traditional paper communications is vital to ensure that company information and updates remain accessible and inclusive to all.

Why engaging with diverse voices will benefit your business

Businesses that take the time to listen to the voices of different stakeholder groups are the ones best setup for success. The old “board knows best” mindset is outdated in 2023. Moving forward, it’s important to engage with a variety of voices to allow your business to become transparent, accountable, and successful.