ABSTRACT
Shareholders are an important stakeholder for listed corporations, especially since they are the owners. By definition, owners should have significant power in influencing the direction of companies. However, as listed corporations have grown, there has been a distinct separation of power between ownership and management, with management power mostly dominating. A check on management power is the board of directors but in recent years activist shareholders have been making more frequent headlines, if not some progress in overturning corporate decisions. Activist shareholders have not quite turned the tables in terms of the power structure but there are increasing examples of shareholders asserting their views, and votes, to reflect their perspective. These reminders of shareholder power are an indicator of the importance of communication with shareholders. While some of this communication is mandatory, there are also additional communication initiatives that can be implemented. Shareholders can be influenced to be supporters of a company’s strategy and objectives if they come to understand a company’s story. In this chapter, we will look at the opportunities and potential for effective communication with shareholders.
