Investor Relations

IMPLEMENTING BEST PRACTICES IN INVESTOR RELATIONS 79Enhance shareholder loyalty and retentionKnow how to deal with crisis communications in Investor Relations.3.1 IDENTIFYING SHAREHOLDERSA listed company that does not seek to identify who its shareholders areruns the risk of not reaching its audience. Knowing precisely who ownsyour stock and why are the keys to building a secure shareholder base. Inaddition, increasing investor activism is making shareholder identificationmore important and more difficult.It is not an easy task, and sometimes quite an impossible one, to draw upan exhaustive list, except if the stocks are held in a nominative or “registered”form. In this case, the shareholder’s identity is recorded in a specificshare registrar maintained by the issuer or a dedicated depositary bank. Yetthe most common form of share ownership is the “anonymous” bearer form,as allowed under certain regulations, and in systems where shares have beendematerialized and are traded in an electronic form.This makes the identification process all the more challenging andrequires resources and systems that can do the following:Track and quantify holdings as well as categories of investors (individualshareholders, institutional investors) from a variety of sources;Provide the senior management team with sophisticated, actionableanalyses.There are different legal and technical means to know your shareholder base.This high-cost and time-consuming effort is worth undertaking only if youhave a clear idea of what your objectives are, if you conduct the analysis ona regular basis, and if you want to proactively manage your free float.Furthermore, companies are not the only ones interested in knowing whoowns their shares. Institutional investors are also very keen to be informed,as it gives them valuable insight into potential evolution of the shares; forinstance, the presence of many hedge funds as owners can result in highervolatility risks, while a large portion of the share held by employees canindicate long-term stability.3.1.1 Legal MeansShare-ownership disclosure regulations vary from one country to another.For instance, some may require that shareholders officially declare their