Shareholders as a Strategic Asset

With the increasing concentration of stock holdings among a relatively small number of institutional investors, company managers are now viewing their major investors as a strategic asset. Company executives are actively managing relations with their major investor through: courting shareholder support in proxy battles and struggles for company control; bringing the voice of investors into the firm; building enduring, personalized relations with stock analysts and money managers; providing accurate and timely information to major holders; acquiring intelligence on the market, competitors, and stockholders through information trading with analysts; and exercising flexible leadership as shareholder concerns and pressures take fresh directions. Many company executives have learned that working with their major holders—rather than without them or despite them—is required for effective oversight of the firm.