In 2023, governance gained considerable attention, pushing IR and corporate social responsibility to the top of the boardroom agenda.

Significant progress unfolded across various fronts. The launch of a Government Digitization Taskforce advocated for a new shareholder ID system, aiming to provide deeper investor insights. Interactive Investor also pressed FTSE100 chairs to improve communication with investors.

While retail shareholders gained increased visibility, supported by initiatives to improve proxy voting from BlackRock, eToro, and Hargreaves Lansdown.

However, alongside these advancements came valuable lessons. Scandals revealed governance flaws in Big Four firms, sparking a re-evaluation of how management should be held accountable.

2024 marks a significant turning point for shareholder democracy and good governance. By learning from past missteps and successes, businesses can work towards making true change a reality this year.

The growing dominance of everyday investors

The rise of retail investors marks a shift in corporate influence. Traditionally dominated by institutional investors, decision-making in large companies is now being impacted by a surge in everyday traders.

In the UK, retail ownership of shares has grown to 13.5%, a significant increase of 30% since 2010. While individually their holdings may not match those of institutions, their combined impact is increasingly noticeable. In 2023, retail investor turnout at AGMs soared, sparking discussions on ESG, executive pay, and diversity across a spectrum of meetings, from McDonald's to entities like Celtic Football Club.

Shareholder voice will only get louder in 2024. As companies begin to gear up to organise their AGMs this year, facilitating shareholder participation therefore becomes crucial. Prioritising open discussion, and debate at these meetings is not something businesses should shy away from this year. It's crucial to note that corporate secretaries and IROs don't have to navigate this terrain alone—they can utilise Q&A technology to create secure spaces for debate.

The reality is the businesses that actively engage with stakeholders, transparently communicate progress, and embrace diverse perspectives at their AGMs are better positioned for success.

The surge in IR meetings

With shareholders increasingly eager to engage, the prominence of IR meetings is also on the rise. While the AGM remains a cornerstone event in the shareholder calendar, offering investors multiple platforms to voice their opinions throughout the year is becoming essential. This trend gained momentum in 2023, with major players like Shell organising a series of IR meetings to maintain engagement.

To facilitate this, businesses need to expand access to their investment relations calendars and proactively communicate these meetings. These gatherings offer regular opportunities for shareholders to raise any concerns, preventing issues from spilling over throughout the year.

AI and IR to become more prominent

In 2023, AI dominated national headlines and the IR industry was no different. Investors turned to tools like SpeechCraft Analytics to understand executives' speech patterns during earnings calls, offering deeper insights into their intentions.

The momentum of AI isn't slowing in 2024. It's set to expand its influence beyond investors, benefitting issuers, regulators, and shareholders alike. For example, AI can also be particularly useful for understanding stakeholder sentiment during other crucial events such as AGMs and ahead of voting scenarios.

The industry's enduring challenge of maintaining frequent communication between boards and shareholders could also be solved by AI this year. In fact, the tech could help provide personalised, round-the-clock shareholder chatbots, promising increased accessibility and responsiveness. Only time will tell with advancements in AI, but it’s important for leaders to keep ahead of them.

Shifting the dial

2024 presents a fork in the road: potential backlash from excluding investors or transformative change by embracing new voices. The vital lesson for IROs and governance members remains unchanged: prioritise transparent, regular communication and honesty with investors. And don't shy away from adopting new technology to navigate this significant shift expected this year—you'll want to be on the right side of this evolving landscape.