Financial Public Relations and Shareholders: A Delicate Balance

by timaldiss on March 2, 2013

Although a company may very well have been built from the ground up, it is a good bet that much of this foundation was initially laid upon the confidence and monetary support of numerous shareholders. Unfortunately, even the mightiest of structures will founder and collapse should their foundations become unstable. In the business world, there is always a risk of losing shareholder confidence and support. Simply stated, a happy shareholder is a loyal shareholder and one who will continue to support a thriving business. Why, then, are some companies still lagging behind in correct financial public relations with their stakeholders?

Internal or External Marketing?

A business is only as successful as the audience it reaches and this position should apply just as much to shareholders as it does to the customers themselves. What good is selling a company to the public if behind closed doors the financial powers that be are in grave doubt? Investor relations needs to equate to more than a rather dry quarterly report; they should engage the shareholders directly. This can help determine whether any dissatisfaction is present. We have all heard about major companies losing millions in capital due to a sudden exodus of key majority shareholders and this can be avoided through direct communication.

Proactive as Opposed to Reactive

Shareholders need to be aware of short and long-term plans. They must understand financial strategies and revenue pipelines. Above all, their input should be proactively desired rather than discouraged. Should an individual begin to question the rationale or motives behind a recent business move this can easily spiral into mistrust and even an outright exodus from a current position. This will give clarity and insight to the shareholder and management alike; potentially avoiding conflicts and misunderstandings.

Sometimes Change is Necessary

While it is all well and good to simply listen to shareholders, it has to be realised that there may be some element of truth should they express displeasure. If a company has gotten to the stage where the shareholders themselves forcibly enact a changing of the guard, not enough was done from the onset to properly address their needs. Never forget that their financial influx represents the lion’s share of a company’s growth and stability. Therefore, proper financial public relations with shareholders are tantamount to continued advancement and need to be recognised as the launchpad for future success.

Tim Aldiss writes for Broadgate Mainland.


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