Best Practices for Shareholder Management

Shareholder management is a critical part of any company, but it can be especially daunting for those who have recently completed a RegA+ or RegCF offering. When you welcome so many new shareholders on board, it’s important to have a plan in place for how you will manage them to ensure a positive relationship. Thankfully, shareholder management can be streamlined with the right tools and communication strategy.

 

Shareholders have a vested interest in how your company performs. They will want to know about the company’s progress, financial information, or future plans, and they have a right to be kept in the loop. Unhappy shareholders may spread negative word-of-mouth about your company, which could hamper your ability to raise additional funds in the future. Additionally, if shareholders feel like they are in the dark about what’s going on with your company, they may choose to sell their shares, which could hurt your stock price. Thus, it is important to have a shareholder management plan in place to ensure that you are maintaining strong relationships with your shareholders. So, what does this look like in practice?

 

Continuous Improvement

 

A company’s first step should be to accurately evaluate its investor relations performance, with the analysis serving as a benchmark. While share price, analyst ratings, and price-to-earnings ratios provide some measure of a company’s ability to meet shareholder needs, they don’t provide much information about other dimensions of the investor relations function, such as the cost of operating the investor relations department or the quality of investor relations communication channels. It is important to establish an objective assessment of such things because ongoing monitoring of these metrics and the overall investor relations strategy can help to identify areas for improvement

 

Regular Communication

 

One of the most important things you can do to manage shareholders is to maintain regular communication with them. This can be done in many ways, such as through email, webinars, podcasts, or blogs. No matter what method you choose, it’s important to keep shareholders updated on your progress and answer any questions they might have. This will show them that you value their investment and are committed to keeping them informed.

 

Use Shareholder Management Tools

 

Another important tip for shareholder management is to use shareholder management tools, such as the shareholder management solution from KoreConX. This platform provides many features and benefits, such as the ability to keep shareholder documents like earnings reports secure and engage shareholders with portfolio management tools that allow them to see detailed information about their investments. Such tools eliminate the hassle of traditional mail and increase the ease of access for shareholders

 

Establish Expectations

 

When welcoming new shareholders on board, it’s important to set expectations from the start. Shareholders should know what kind of communication they can expect from the company and how often they will receive updates. It’s also important to let shareholders know what information will be shared with them and what will remain confidential. By setting clear expectations from the beginning, you can avoid misunderstandings and build trust with shareholders.

 

Seek Feedback

 

Another important tip for shareholder management is to seek feedback from shareholders regularly. This can be done through surveys, focus groups, or one-on-one interviews. Shareholders will appreciate being asked for their opinions and it can help you identify any areas where you need to improve your communication or management strategy. Feedback from shareholders may also be a great source of ideas for marketing, new or improved products, or other recommendations that will positively affect your business.

 

Be Transparent

 

Finally, it’s important to be transparent with shareholders about the company’s progress, financial information, and future plans. It’s easy to communicate good news, but a transparent company will ensure even the bad news is accurately conveyed to investors in a timely manner. Shareholders need to have confidence in your company–you don’t get that by denying the existence of problems, but by showing that you are proactive in (ideally) preventing them, identifying them, and solving or mitigating them. In some cases, it might make some sense to put on a rosy public face to the public but shareholders aren’t outsiders; they’re owners. This will show them that you’re committed to keeping them informed and help build trust between the company and its shareholders.

 

By following these tips, you can streamline shareholder management and build strong relationships with shareholders. With the right tools and communication strategy in place, you can ensure that shareholders are kept up-to-date on your progress and that their expectations are managed effectively. As a result, everyone remains on the same page, which can lead to a more efficient and cohesive shareholder management strategy, improve shareholder relations, and lead to a more successful enterprise.

 

Join the All-in-One platform for the Private Capital Markets

Free forever, KoreConX assists all participants in the Private Capital Markets with activities like raising capital, managing cap tables, investment portfolios, and ensuring compliance.

Book a Call