In Nigeria’s rapidly evolving business landscape, technology has emerged as a transformative force, reshaping industries, and redefining traditional practices. Within the realm of corporate governance and investor relations, the influence of technology cannot be understated. This article delves into the pivotal role that technology plays in optimising shareholder engagement in Nigeria.
By leveraging innovative technological solutions, companies can strengthen their relationships with shareholders, foster transparency, and empower investors like never before. This article will look to uncover the various facets of technology’s impact on shareholder engagement and understand how Coronation Registrars is at the forefront of this paradigm shift.
The historical significance of shareholder engagement in Nigeria
From the earliest days of Nigeria’s corporate landscape, shareholders have occupied a pivotal role in shaping the destiny of companies. Shareholder engagement often took the form of face-to-face meetings, where stakeholders gathered to deliberate on company matters. These gatherings served as a bedrock of shareholder engagement, providing a forum for investors to vocalise their concerns and sway corporate decisions.
The historical narrative of shareholder engagement in Nigeria underscores the enduring importance of shareholders as active architects of corporate governance. Their influence has transcended the bounds of passive investments, casting them as active participants in the journeys of numerous enterprises, moulding their directions, and driving the imperatives of transparency and accountability.
In tandem with the evolving landscape, the regulatory framework in Nigeria underwent substantial transformations, fortifying shareholder protection and fostering enhanced engagement. In 1979, the establishment of the Securities and Exchange Commission (SEC) and other regulatory bodies, including The Nigerian Exchange Group (formerly known as the Nigerian Stock Exchange, established in 1960), emerged as pivotal milestones in the journey of corporate governance within Nigeria. These institutions played instrumental roles in sculpting corporate governance practices, ushering in an era of heightened transparency and endorsing a culture of shareholder engagement.
The technological revolution in corporate governance
Fast forward to today technology is transforming the way companies engage with their shareholders in Nigeria and worldwide. From the use of digital platforms to harnessing big data and analytics, technology has unleashed new possibilities in corporate governance. The digital age has ushered in an era of transparency, accessibility, and real-time communication, revolutionising traditional corporate practices.
As technology has advanced, so too have the expectations of modern shareholders. Shareholders today are not merely passive investors; they are active participants in the corporate journey. They seek transparency, accountability, and a say in decision-making processes.
The digital age has cultivated a thirst for real-time information. Shareholders expect instant access to company updates, financial reports, and news that may impact their investments. They want to be empowered to make well-informed decisions. Modern shareholders are no longer content with just receiving annual reports. They desire an ongoing and active engagement with the companies they invest in. This shift from passive to active engagement has been accelerated by technology.
Technology as the catalyst
Technology has provided a plethora of digital platforms for companies to engage with shareholders seamlessly. Websites, mobile apps, and social media channels have become the go-to mediums for disseminating information, receiving feedback, and fostering dialogue. The power of big data and analytics cannot be underestimated. By analysing shareholder data, companies gain valuable insights into shareholder sentiment, preferences, and behaviour. This knowledge informs decision-making and allows for a more personalised approach to engagement.
The COVID-19 pandemic has expedited the adoption of virtual shareholder meetings, not only enhanced safety but also extending the global reach of shareholder involvement. These online gatherings enable shareholders from around the world to engage with the company in real-time. Virtual meetings have streamlined companies’ ability to interact with shareholders on matters of risk management, allowing them to offer updates on risk management strategies and promptly address shareholder inquiries.
For example, the proxy voting process in Nigeria has been streamlined through technology, making it easier for shareholders to participate in corporate decision-making, thereby enhancing the democratic aspect of shareholder engagement.
With the increasing reliance on technology, cybersecurity is paramount. Companies must invest in robust cybersecurity measures to safeguard shareholder data and protect against cyber-attacks and threats. The responsibility to protect sensitive shareholder information falls squarely on companies. Data encryption, secure servers, and strict access controls are essential to prevent data breaches and maintain trust. At Coronation Registrars, we have embraced technological advancements to enhance shareholder engagement.
The future of shareholder engagement in Nigeria will undoubtedly see further technological advancements. We anticipate the integration of artificial intelligence, blockchain, and augmented reality into the shareholder engagement ecosystem. These technologies will enhance personalisation, security, and accessibility.
As technology continues to automate various aspects of shareholder engagement, companies must strike a balance. While automation provides efficiency and scale, maintaining a personal connection with shareholders will remain essential for trust and rapport.
To conclude, technology has fundamentally reshaped shareholder engagement. Companies that embrace this technological frontier can forge lasting and meaningful relationships with their shareholders, driving transparency, empowerment, and accountability. Together, we will continue to redefine shareholder engagement in the digital age.
Aleshinloye is MD of Coronation Registrar.
