Many managers today approach investor relations as a marketing exercise: pitching the company’s business and strategy to as broad of audience as possible in anticipation that some shareholders will purchase the company’s stock. They hope this will further boost the stock price and keep the company’s directors and other shareholders satisfied. In other words, investor relations often uses a dragnet, whereby managers cast nets into an ocean of shareholders in hopes that they catch some of them.
How to Attract the Right Shareholders
Instead of casting a wide net, try a more strategic approach.
August 08, 2023
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Summary.
Many companies go about investor relations all wrong, pitching their companies and plans to whatever audience they can and hoping some shareholders will buy in. This approach wastes time and valuable resources building relationships with the wrong shareholders who do not bring the right competencies, connections, and commitment to a business. Managers tasked with investor relations often believe their role is to “sell” the business — or the strategy the company pursues — with the sole goal of retaining and attracting as many shareholders as possible. Rather than selling a strategy in investor relations, managers need to think strategically about investor relations and the right shareholders they need for their business. By co-analyzing a company’s strategy with the shareholder landscape, managers can identify and attract strategic shareholders, who can help their business thrive. We have found this is best done with a five-step approach to strategic shareholder management.