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Inclusive investor relations: a lot can be learned from how the ‘third sector’ goes about it 

When it comes to looking after all its stakeholders, you don’t need to seek further than Britain’s charities for a robust model. Charity begins at home, it’s said. Sadly, public companies tend to overlook smaller retail shareholders.

It’s not an exact comparison. Charities don’t have shareholders for a start. Their ‘investors’ are not looking for gain – at least, not a financial one. Charities do, nevertheless, like companies, have financial supporters and stakeholders. You could compare retail investors to regular donors. Both commit sometimes significant portions of their wealth to one company or another, or one charity. The brand value of the country’s largest charities¹ (Cancer Research was worth £2.3bn in 2018) is reason alone to sit up and take note.

The UK’s most successful charities have² realised for some time supporters, properly engaged with, repay time and effort by investing more. Many public companies, on the other hand, weight their shareholder engagement disproportionately in favour of institutional investors and powerful backers. Retail investors seem like the poor relations, receiving scant, sometimes minimal service. 

Most charities have major donors too, serviced by specific teams as recommended by the Institute of Fundraising. This does not mean the smaller, usually more numerous, supporters, are left out in the cold – they have significant resources allocated. Usually, successful charities have a deep understanding that smaller supporters can turn into higher value donors. We’ve all seen the TV ads asking people to leave legacies in wills, for example – with the emphasis on the difference ordinary donors can make.

Companies should also be nurturing their smaller stakeholders. Institutional investors in listed companies regularly have unfettered access to all the information they desire. Briefings, broker notes, bespoke roadshows and face time with the executive and board members are part of the service. Retail investors rarely enjoy the same access. 

On the other hand, fundraising departments of large charities are carefully structured to ensure supporters feel ‘loved’. Financial support is recognised. Engagement programmes are used to keep supporters up to date with ample opportunities for further giving. Precise metrics as to Life-time value (LTV) and cost per acquisition are watchwords. Anyone who has ever donated to a charity will witness said charity’s eagerness to keep in touch.

Can the same be said of companies? How many know or value the loyalty of their investors? The time a UK retail investor holds shares has shrunk in recent years and is fast approaching US levels of brevity according to latest research. The 2022 Investopedia Financial Literacy Study, suggests GenZ-ers now think they will get better returns long-term from Crypto than stocks and shares – not a good omen for the stock markets.

Retail investors matter. In 2020 the FT estimated 15 per cent of the UK Stock Market was held by individual shareholders. Retail investors are especially important for small and mid-cap businesses – ownership rises to 25 per cent for AIM-listed companies, according to research. And it is not just in the UK³.

Looking on the bright side, attitudes may be about to change for the better. The Engagement Appeal was recently launched to promote inclusive investor relations and bring together companies and their retail investors. The organisation offers guidance and encouragement to ensure any company’s investor relations are as progressive as their corporate comms might suggest. 

The enlightened concept of inclusive investor relations is also gaining traction. This form of investor outreach aims to redress obvious imbalances through practical measures. Digital and physical (hybrid) Annual General Meetings, for example, work alongside investor communications to ensure retail shareholders receive information and access they need in the format they require. Inclusive language delivered via social and media channels can help young or novice investors better understand the key financial messages. 

Inclusive investor relations offer a lot of benefits to the corporate world. Engaged investors are likely to buy more shares and hold them for longer. They will be more inclined to recommend a company to their friends or on forums. Furthermore, a new wave of ‘undiscovered shareholders’ is out there, in the form of GenZ-ers or late Millennials. With greater interest, better valuations maybe achieved, a key current criticism of the FTSE compared with the Dow or Nasdaq. 

Surprisingly, an inclusive investor relations strategy as devised by Gracechurch Group, costs little more than traditional investor relations and costs a tiny fraction of share buyback programmes which are traditionally designed to enhance shareholder value. 

The third sector has long taken an inclusive approach to stakeholder relations. The clear benefits for corporates and retail shareholders mean it’s worth all public companies considering doing the same. ‘Nothing’ no longer seems like a viable option.

  1. Cancer Research UK ranked most valuable charity brand – Charity Times
  2. UK Giving 2022 | Largest charity giving study in the UK | CAF (
  3. Retail Investors Statistics in 2023 – Marketplace Fairness
Adam Whipps

Adam is marketing campaign strategist who has worked for numerous blue-chip companies in both the UK and overseas. In particular, he has a deep understanding of the customer acquisition landscape with a focus on return on investment. Read more...