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.

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?

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