The 2021 Australian Investor Confidence Survey (Chartered Accountants ANZ) found that 50% of people who invest in publicly listed companies on the ASX have little to no confidence in the companies they invest in. Two of the top concerns for little to no confidence were (1) companies are not trustworthy and (2) companies do not provide enough information. Investors do not feel like they can easily communicate with the companies they invest in or intend to invest in, resulting in a lack of confidence and engagement. 

Board members want to keep shareholders happy and investors want to be listened to. Why is investor engagement still a problem for listed companies?

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Two-way investor communication software has not previously existed

Until now, there has been no technology available to effectively scale two-way investor communication which replicates the same engagement and attention received by institutional shareholders for a shareholder base which is often much larger in numbers. 

Historically, listed companies have prioritised engaging institutional shareholders. It is easy for board members to sit down face-to-face with institutional shareholders, talk to them multiple times a quarter and maintain a strong relationship with their significant investors. Board members of ASX listed companies simply do not have the time to engage with every investor one-on-one or face-to-face. 

Without the technology to scale this level of two-way communication for hundreds or tens of thousands of  investors, it has been unfeasible for listed companies to establish strong relationships with a large portion of their shareholder base, especially in a way that is convenient for both parties. Any good relationship is built off communication so how can companies expect to create relationships with their shareholders if they are only providing one-way information to them a few times a year? 

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The lack of two-way investor communication data 

Due to the lack of effective communication lines between listed companies and their respective  shareholders, board members do not know what their investors want or how to keep them happy. 

Listed companies have previously relied on third party big data reports covering general trends, attitudes and market sentiment. There is limited understanding of the qualities, needs, behaviours and desires relevant to a company’s specific unique shareholder base. When a company does not know what their shareholder base specifically needs to stay happy, informed or perceive the company is trustworthy, there is a chance investor retention will drop.

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One-way pattern of communication

The majority of traditional investor relations practices, internally and externally, have evolved from one-way communication protocols. When sent information, investors have limited accessible avenues for reciprocation of communication in the absence of two-way communication opportunities. Providing contact details is not two-way communication. 

If a investor invests in five listed companies, they would have to visit five separate company websites to then navigate to five separate investor portals to then scroll to find the information they are looking for. 

Investors are constantly fed lengthy and often confusing information through one-way communication methods including quarterly announcements, notices, social posts and email blasts. However, according to the Orient Capital Perception Study (2022), ‘a majority of investors (over 60%) are often unable to explain a company’s strategy and feel there is a lack of defined KPI’s to track it.’ Even Annual General Meetings (AGMs) have one-way barriers including time, technology, location, accessibility and stage fright. 

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Stop the one-way pattern. 

Diolog is a two-way investor communication software. Two-way communication does not mean more likes or comments on social posts. Two-way communication is about building relationships with investors to keep them interested, engaged and happy, because a happy investor is a valuable investor. 

Over 9 million Australians invest outside their superannuation fund. Diolog enables listed companies to communicate with current  shareholders and prospective shareholders. 

Diolog provides a tool for listed companies to disrupt traditional forms of investor communication and begin best practice two-way communication with investors.