Skip to content

18 June, 2025

  • Saved Articles
  • My Account
  • Subscribe
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • public markets

      How can we boost public markets?

      Growing companies need adequate liquidity, together with smart regulation and corporate governance that is not...

    • global disruption

      5 essential tenets for coping with global disruption

      With global geopolitical tensions on an unprecedented scale, disrupting markets and data, how can governance...

    • crisis pattern

      How to avoid reputational pitfalls

      There are patterns to business crises, meaning boards can anticipate reputation threats across the stages...

  • Comment
      • View all
    • Warren Buffett

      CEO succession: what boards can learn from Warren Buffett

      The billionaire investor is handing the reins to Greg Abel, after a long, strategic succession...

    • gender pay gap Act now to close the gender pay gap

      This month, it is 55 years since the Equal Pay Act, yet pay inequality persists....

    • leadership on AI How to get ahead on AI leadership

      The question isn’t how AI will change business—it’s whether leaders can harness it to drive...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • UK Corporate Governance Code Board meetings ‘are not up to scratch’

      Nearly three-quarters of board members believe the board’s performance in meetings needs improvement, an expert...

    • financial sanctions Tariffs chaos drives boardroom focus on resilience

      Business leaders will prioritise the resilience of their organisations in the face of economic upheaval...

    • ai boards Corporate world has a ‘huge appetite’ for artificial intelligence

      AI could change boardrooms to the extent that directors’ duties would change too, a panel...

  • Board Careers
  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Board Advisory & Corporate Services
    • ACCA sustainability reporting 2025 cover

      Sustainability reporting: risk and materiality 2025

      ACCA’s sustainability guide takes a practical approach to helping businesses with sustainability reporting.

    • Cybercrime Trends 2025 cover

      Cybercrime Trends 2025

      SoSafe’s report breaks down what’s shaping cybercrime in 2025, outlining six trends, including AI and...

    • UK Stewardship Code 2026 cover

      The UK Stewardship Code 2026

      The UK Stewardship Code 2026 is the FRC’s update of the 2020 edition of the...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Careers
    • Board Expertise
    • finance
    • Technology

The rise of corporate democracy

by Georgia Stewart on September 29, 2022

After BlackRock’s move to expand voting choice to its clients, other investors will rightly be expecting their companies to follow suit.

corporate democracy

Image: r.classen/Shutterstock.com

The foundation of public markets is exactly that: the public. Millions of people pay into the investment system through workplace pensions, ISAs, and other investments every year and, in doing so, become owners—albeit indirectly sometimes—of publicly listed companies.

Most of these people participate in the economy in other ways, too. They are workers and voters, and, unsurprisingly, they have vested interests in environmental, social and governance (ESG) issues, both because of their investments and despite them.

In June, Board Agenda reported on an initiative by BlackRock that could empower $4.7trn of their own assets to be voted by their clients.

Already, pension funds, endowments and charities have taken up the opportunity to vote their portion of the fund—a figure running into many billions of dollars—the way they want, instead of how BlackRock chooses. This facility from BlackRock created a seismic shift toward a democratic corporate governance system.

But what if a board’s top 10 investors splintered overnight into 100 or 1,000?

And the movement is only set to grow. Retail and institutional investor clients worldwide are asking the same question of their own fund managers, who are scrambling to launch competing solutions that are flexible and light-touch.

For example, our stewardship platform at Tumelo will allow clients to set up alerts for upcoming votes that are material to their fund and investment philosophy, filtering by issue, industry, company or fund manager. Clients will be able to give an indication (called “expression of wish”) or instruction (called “pass-through voting”), and fund managers will be able to respond—all in real-time with zero Zoom calls and minimal overheads.

With fund managers onside, platforms like Tumelo are set to extend this functionality right the way down to the underlying retail or pension investor. That’s right: all the way to the public.

What’s in the balance?

Boards already have the difficult task of managing many stakeholders: shareholders, customers, employees, supply-chain connections and the wider community. Time invested in shareholder management (investor relations) has historically been concentrated at the largest institutional investors. With the most shares, they carry the most weight on engagements because they have the greatest ability to affect share prices and vote outcomes such as director elections and CEO pay.

But what if a board’s top 10 investors splintered overnight into 100 or 1,000? What would investor relations look like then?

This is an opportunity to close the loop between shareholders, consumers and citizens

The manager would retain the right to buy and sell, but they will not hold the vote. Your shareholder story needs to reach pension trustees and pension members, university endowments and university students, religious institutions and investing congregations.

Your shareholders will be everywhere, and they will behave like stakeholders, too. They will be in the communities where you operate, related to your employees, and many will be your customers. And again, they will have vested interests in ESG issues, both because of their investments and despite them.

There are some risks associated with democratised corporate governance: unintended consequences we must adapt our systems to resist. For example, we must not entrench managers to shareholders’ detriment; it should not be easier for activists to attack well-run companies or proxy advisors to dictate outcomes. These systems need to be low-cost and scalable, so as not to detract significantly from investment outcomes or company budgets. If built well, a democratised system will be fair for investors and insightful for companies.

Define and live by your purpose

This is an opportunity like none before for a corporate board to embrace stakeholder capitalism, to define and live by your purpose, and to let go of the mantra that short-term shareholder value prevails.

This is an opportunity for investor relations teams to modernise and digitalise, to combine with marketing teams, and tell your story to a bigger and more diverse investor audience, who will consume information differently and become educated at a different pace.

It will all be new but with significant upside. This is an opportunity to close the loop between shareholders, consumers and citizens.

Stakeholders and shareholders are not in conflict: they are one and the same, with plenty of common ground that bodes well for business outcomes.

Georgia Stewart is chief executive of software provider Tumelo

 

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • Greenwashing threatens shareholders’ interests
    July 4, 2022
    greenwash

    ‘Companies that believe their own greenwash are embedding liability and storing up risk’, warns chair of UK Environment Agency.

  • US corporate governance improvements 'slowed or stagnated' in 2021
    January 13, 2022
    Employees talking outside offices

    Report suggests crisis "fatigue" is eating away at gains made during 2020, with employee issues and ESG highlighted as concerns.

  • Focus on the 'G' of ESG
    July 11, 2022
    governance

    Listening to what stakeholders define as valuable is the key to successful governance—and it will make corporate reporting much easier, too.

  • ESG: Should E and S break up with G?
    May 15, 2023
    ESG break up

    In the world of investing, maturity has revealed significant practical shortcomings in combining environmental, social and governance.

Search


Follow Us

Register Free

Stay in the know! Register to access the latest governance news; plus receive updates about our events and podcasts – Sign up here

 

Most Popular

Featured Resources

wef global risks 2025

The Global Risks Report 2025

The 20th edition of the Global Risks Report reveals an increasingly fractured global...
Supply chain management cover

Strategic Oversight in Supply Chain Management: A Guide for Corporate Boards 2025

Supply chains have become complex, interdependent and opaque and—according to research...
OB-Cyber-Security

Cyber Security: What Boards Need to Know

Maintaining firewalls, protecting servers and filtering malicious emails rarely make...

The IA’S Principles Of Remuneration 2024 2025

This guidance from the Investment Association is aimed at assisting remuneration...
Diligent 2024 leadership tech cover

Leadership, decision-making & the role of technology: Business survey 2024

This research report by Board Agenda and Diligent sheds light on how board directors...

Director Reference Guide: Navigating Conflict in the Boardroom

The 'Director Reference Guide' on navigating conflict in the boardroom provides practical...
Nasdaq 2024 governance report cover

Nasdaq 2024 Global Governance Pulse

This Nasdaq survey gathered data from more than 870 board members, executives, and...

Becoming a non-executive director (4th edition)

Board composition is the subject of much debate, while the role of the non-executive...
art & science brainloop new cover

The Art & Science of Creating an Effective Board

Boards are coming under more scrutiny and pressure than ever before from regulators,...
SAA First time NED guide

First Time Guide for Non-Executive Directors

The role of the non-executive director has never been more vital: to advise, support,...

Register Free

Stay in the know! Register to access the latest governance news; plus receive updates about our events and podcasts. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Board Advisory & Corporate Services
  • Media Marketing Solutions
  • Contact Us
  • About Us
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
|

Copyright © 2025 Questor Media Group Ltd.

  • Terms & Conditions
  • Privacy Policy
  • Sitemap