Boards have faced a demanding mix of economic and financial challenges throughout 2024, and these challenges will likely continue throughout 2025. In the EU, the bloc’s two biggest economies, France and Germany, face severe macroeconomic issues, while recession looms in the UK. Also, conflict in the Middle East continues to contribute to global market volatility, and the unpredictability of the Trump regime’s tariffs may cause further tension.

Such a volatile backdrop makes it more important than ever that businesses stay in close touch with their stakeholders and investors. This puts effective investor relations (IR) near the top of board agendas. To be able to deliver the depth and ease of communication that boards now require, the evolution of IR will accelerate and adopt an even more tech-driven approach.

By leveraging the latest technology, such as the kind of platforms Proxymity offers, companies can streamline shareholder engagement, enhance trust, and navigate the complexities of a shifting landscape. By prioritising open communication, data-driven strategies, and proactive engagement, businesses can keep stakeholders constantly informed and engaged.

Clarity of communication

Periods of economic and political volatility compel businesses to adapt swiftly, often altering strategies to respond to new policies or market dynamics. This fluidity makes the need for transparent and continuous communication with investors essential. Shareholders demand clarity, particularly during critical junctures such as annual general meetings (AGMs) or when significant strategic changes occur. By adopting proactive and timely communication methods, companies can avoid conflicts and misalignments and fortify trust.

A research survey by investor relations association the NIRI, found that 75% of investors prefer digital updates, while 60% are dissatisfied with current levels of communication, citing a lack of clarity and responsiveness.

Digitalisation, hence, is crucial for companies to enhance communication and shareholder relations, and tools such as Proxymity’s Vote Connect and Shareholder Insights provide this real-time connectivity with shareholders. These technologies ensure that critical information is exchanged promptly, reducing the likelihood of delays or miscommunication. By embracing these innovations, businesses can foster stronger relationships with investors, even in times of economic uncertainty.

Why data is the key to shareholder concerns

Understanding shareholder concerns and aligning business strategies with their expectations are crucial, especially in an environment riven with political and economic uncertainty.

By analysing data such as voting patterns and shareholder sentiment, companies can identify potential areas of contention and address them before they escalate. A good example is companies’ ESG and sustainability commitments. Only half of finance leaders and investors believe corporations are likely to achieve their sustainability targets, according to a 2024 EY Global Corporate Reporting Survey.

This scepticism highlights the need for companies to examine past voting patterns so they can identify which investors they need to engage with the most to try and lessen any conflicts and tensions.

Platforms and digital services enable businesses to adopt a data-driven approach to shareholder engagement, delivering secure, seamlessly integrated comprehensive reporting on a firm’s shareholder base in real-time, allowing boards to spot trends over time and analyse the impact of significant business changes such as a new strategy, a focus on M&A or entry into a new market.

By identifying concerns early and aligning board strategies with stakeholder expectations, companies can foster smoother decision-making and mitigate risks. A commitment to data-informed strategies not only reduces friction but also strengthens the alignment between corporate goals and shareholder interests.

A more engaged shareholder base

Today’s investors are more diverse than ever – two-thirds of women and 37% of Gen Z now invest in stocks, and 89% of Gen Z shareholders either have voted or have an interest in voting in AGMs. This new breed of investor is typically more engaged, actively monitoring corporate strategies and holding businesses accountable for their decisions.

This increased activism was evident during the 2024 AGM season, which witnessed a record-breaking 18% rise in governance-related shareholder proposals. To respond effectively to this trend, companies need to implement comprehensive IR strategies that reassure stakeholders and build confidence.

A more digital approach to shareholder communications can facilitate seamless AGM participation and proxy voting, enabling companies to engage more meaningfully with an active shareholder base and ensure they are consistently informed and involved.

Reshaping investor relations

Today’s more volatile global economic and political environment demands that companies rethink their approach to investor relations.

Corporate strategies are rapidly evolving to try and keep up with the pace of market change, which requires businesses to communicate with transparency, use data effectively, and adapt to the demands of an increasingly engaged shareholder base.

Integrating advanced tools, digital shareholder communications and a more tech-driven approach into their IR frameworks enables businesses to streamline shareholder engagement and build enduring trust. In doing so, they can navigate uncertainty with confidence, ensuring not only short-term stability but also the foundations for long-term success.

By prioritising transparency and adopting innovative, digital solutions, businesses can rise to the challenges of today’s volatile landscape and emerge stronger, more resilient, and better aligned with their stakeholders’ expectations.

Jonathan Smalley is the COO and co-founder of digital investor communications platform Proxymity.