Look After Investor Relations to Protect Your Ability to Run the Company

Looking after investors = looking after management control. A previous message about the financial institutions that truly rule the world referred to the two fund companies BlackRock and Vanguard. I took a brief look at the documentary Monopoly. Some of it involves deep-state conspiracy theories, which I personally do not much like. My mind is simple; things that complicated are not for me. Returning to the title: looking after investors = looking after management control. Recently, the founder of a very large Taiwanese group retired to pursue personal dreams and ambitions. This founder remains its largest single shareholder, but the appointed successor as chair was promoted from professional management and was not one of the veterans who originally built and expanded the business. I have heard that the founder can no longer easily return to the group built with their own hands. There are many reasons, which I will not detail. The new chair, though only a professional manager with a small stake, has managed foreign-investor and broader investor relations extremely well. So despite apparently limited share ownership, the position is actually very secure. As for whether major shareholders, including foreign and institutional investors, have influence even without voting rights, my personal understanding is this: voting rights bring influence, but even without voting rights, buying and selling shares can create influence. If Buffett invites Coca-Cola's CEO to dinner, it is easy to imagine that the CEO would find it hard to refuse. If legendary fund manager Peter Lynch wants to meet the CEO of a large US company over dinner, probably no CEO can simply refuse outright. Nor should it be particularly difficult for the chief investment officer of a major Taiwanese institution or foreign investor to arrange dinner with a listed company's leader. Such influence is built little by little. Returning to the title: only by looking after investor relations are you also looking after your own ability to run the company.