Shareholders as a Strategic Asset

by Michael Useem

Fall 1996

Volume 39
Issue 1

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With the increasing concentration of stock holdings among a relatively small number of institutional investors, company managers are now viewing their major investors as a strategic asset. Company executives are actively managing relations with their major investor through: courting shareholder support in proxy battles and struggles for company control; bringing the voice of investors into the firm; building enduring, personalized relations with stock analysts and money managers; providing accurate and timely information to major holders; acquiring intelligence on the market, competitors, and stockholders through information trading with analysts; and exercising flexible leadership as shareholder concerns and pressures take fresh directions. Many company executives have learned that working with their major holders--rather than without them or despite them--is required for effective oversight of the firm.

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