How to keep investors happy

How to keep investors happy – a guide to ensuring your company’s work aligns with the people supporting it. 

Investment is often the soul of a business. It’s your crucial start in the industry, your constant source of breathing space, and your ticket towards expansion. 

As a board member, you’re the crucial link between your business and investors. It’s your job to keep those investors happy and confident. They must be satisfied that the company is being run correctly and has a planned, sustainable, and successful future. 

Here’s how to ensure you do this well. 

First off, let’s start with the basics:

Investing is the way many companies acquire the funding they need to operate and make a profit. Investors offer this money on the promise of a higher return at a certain point in the future. 

Investors believe in the product or service your company offers but also in you, the director, and how you and your colleagues will run the company. 

Therefore, remember that you have a fundamental fiduciary duty to act in the best interests of those investors, who will depend on you for accountability and expertise in overseeing progress.

You have a problem. Any good investor will know the warning signs when accountability fades. 

Ramifications will depend on the situation; sometimes, the investor will simply ask for more action, communication or clarity on an issue that stresses them. Other times, they may resort to something more severe, like requesting a governance shake-up or pulling funding. Anything goes – it’s their money, after all.

Accountability means transparency on all things concerning the company’s fortunes and how it’s being run. 

For directors, that means following the basics – submitting all required reports, data, and updates on decisions and the logic behind each one. All should be provided on time and wherever relevant. 

These basic steps are not only part of routine good governance; they’re also a huge indicator that your board has control over what’s going on.

These days, investors and other stakeholders expect many board members, and everyone is acutely aware of those modern standards. 

Directors will be scrutinised to ensure they are not abusing their position or letting standards slip through lax oversight or carelessness. Conveyor belts of modern corporate scandals show us this repeatedly and continuously inspire new legislation and stakeholder demands to ensure they don’t happen again. 

Because of that, board members need to ensure they maintain high standards throughout their time on a board. It won’t do to follow them “eventually” or only when scrutiny increases because stakeholders will see through it easily.

Effective investor communication is a delicate balance. On the one hand, you want to ensure the correct information is shared; on the other, you want to be strategic to not saturate your stakeholders with knowledge that twists context or is simply too much irrelevant information to process. 

Generally, consider your regular investors’ updates an overview of company performance, decisions, and strategies. Use key metrics that have been agreed on in advance and demonstrate a company’s overall health. 

Common examples of these communications are annual reports and shareholder meetings. They’re structured, thorough but not overly so, and they build trust and confidence among investors, showing that their interests are integral to the company’s governance practices. 

These channels also foster a sense of involvement and commitment, which is critical to maintaining their support and satisfaction.