ABSTRACT
This chapter has two parts. The first part considers the full spectrum of investor engagement and shareholder ideology, contrasting the value actively engaged investors can bring at one end and noisy hostile investors at the other, and suggests the factors that have given rise to greater levels of shareholder activism.
The chapter also examines the importance of organisational purpose, society’s growing expectations of what companies should stand for, how they should be evaluated and the challenge this can create for boards.
The second part of this chapter is a letter from a major investor to the board; it discusses the desire for greater accountability from boards and the challenges facing investors wishing to bring about change in a thoughtful and planned way. Emphasis is placed on strategies that boards can consider in fostering more productive relationships with investors: clear-eyed advice to boards on how they should engage with investors; how best to explain the company plans to protect and grow their investment; how to build greater alignment around objectives and ensure a meeting of minds on a range of governance issues.
