Corporate governance: the challenge for communications practitioners

Abstract

The effective management of shareholder communications requires a close understanding of both the formal and informal components of companies' relationships with their major shareholders. The ownership of listed companies is very concentrated and typically the ten largest investors control around one‐third of their shares. Although these shareholders are also those most likely to vote, their greatest influence on companies is through their direct relationships and private meetings with key members of the board. These are a key component of corporate governance, but are not consistently effective in dealing with under‐performing companies, nor are investors outside the top ten or 20 fund managers in the UK often involved. Companies and investors need to balance the apparent efficiency of these relationships with their impact on corporate performance. Limited transparency leads to reduced accountability, both of which need to be addressed in the planning and implementation of companies' communications programmes if long‐term shareholder value is to be maximized.

Citation

Gaved, M. (1997), "Corporate governance: the challenge for communications practitioners", Corporate Communications: An International Journal, Vol. 2 No. 2, pp. 87-91. https://doi.org/10.1108/eb046538