TEA’s 10-Step Guide to Enhancing Shareholder Engagement
The Engagement Appeal (TEA) exists to foster more effective and inclusive engagement between companies and investors. This mutually beneficial engagement not only helps mitigate risks but also brings diverse perspectives to businesses, and ensures long-term stability for both companies and their investors (read more in our blog, “Inclusive Investor Engagement is Good for Business.”)
This movement is about collaboration: people assisting people, businesses supporting individuals, and vice versa. Our goal in 2024 is to build upon existing positive practices, address gaps, improve shortcomings, and harness existing technology for maximum impact.
To guide both companies and individuals toward more inclusive investor engagement, we’ve crafted a 5-step framework that we’ll be sharing widely in 2024 and beyond.
Step 1: Commit
Take the time to understand your shareholders and commit to regular, two-way engagement using accessible digital methods.
Step 2: Establish Company Policy
Develop clear policies outlining your journey towards more inclusive engagement. Collaborate with key stakeholders to create a roadmap with achievable targets.
Step 3: Enact Company Policy
Put these policies into practice. While priorities may compete, commit to following through on your engagements and adequately resource your policies.
Step 4: Measure Progress
Set clear targets for increased engagement and measure progress at agreed intervals. Regularly assess whether your business is on track to meet its goals and, if not, adjust the pace of change accordingly.
Step 5: Report on Progress
Communicate progress to all stakeholders through formal means like AGMs, post-AGM announcements, and reports. Additionally, consider less formal updates to demonstrate transparency and reinforce positive efforts.
Explore formats beyond the AGM, such as pre-AGM engagement sessions, to foster two-way communication in compliance with regulations and guidelines.
For Individual Investors
Step 1: Know Your Investments
Understand your opportunities for engagement, including voting procedures and key documentation like annual reports. Stay informed and be ready to participate actively.
Step 2: Know Your Rights and Responsibilities
Identify how your investments are registered and learn about the companies in which you’re invested. Leverage online tools for comprehensive information.
Step 3: Network with Other Investors
Harness collective power by collaborating with other retail investors. Join individual investor groups and campaigns to build a sense of community and amplify your influence.
Step 4: Exercise Your Rights
Participate at every opportunity—engage with companies, attend or vote at AGMs, leverage proxy voting, and actively participate in transactions.
Step 5: Measure the Outcome of Your Engagement
Evaluate the impact of collective engagement on performance, both financially and in crucial ESG areas. Assess how your engagement has contributed to positive outcomes aligned with your priorities.
By following these comprehensive steps, both companies and investors can contribute to a more inclusive and impactful landscape for shareholder engagement.
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