Can Minority Shareholders influence Management ?

As a minority shareholder myself in several companies, the question which has always popped up in my mind is the extent of influence which minority shareholders have on the Management of the companies which one owns. After all, as part-owners of a company, minority shareholders should have some influence or say on the running of the business, besides just showing up to attend AGM and voting on perfunctory matters. However, let's explore how this could be done in a more constructive way, and whether Management actually responds in ways which would enhance shareholder value.

In the kind of economic environment we are in now, companies have started bombarding (yeah, carpet bombing) shareholders with rights issues. Hapless minority shareholders have to choose between forking out cash or else get diluted (sometimes massively so). So can this be taken as a sign that Management has ignored the plight of minority shareholders and went ahead with such issues due to the backing of the majority shareholder (in most cases, it's Temasek). How can aggrieved minority shareholders voice their displeasure and disappointment ? It would seem that there are currently no proper channels or avenues besides the EGM; and even then the majority shareholders' votes would more than negate the small voices of a majority of the minority shareholders. This is indeed worrying and should be properly addressed by SGX.

Another avenue which shareholders can make themselves heard is through the so-called IR department (an abbrieviation for Investor Relations). Some companies have their own IR department while others engage a PR firm as their IR contact. Shareholders can call in to ask questions about the business or to request annual reports (I've done so myself). However, the flip side is that the person whom you're asking is unlikely to be the top Management or someone from the Board of Directors; which means the answer you probably will get is a standard one. Since companies do not like to disclose price-sensitive information, you may just get a curt reply that they are not in a position to comment further. Companies hiring the PR firms are more "marketing" by nature - they tend to use nicer language in press releases and to phrase things more positively. Nothing wrong with that, but sometimes the truth is the truth so let's just call a spade a spade. Companies I own which engage such PR firms are Ezra (Oaktree Advisors) and Swiber (August Consulting). Companies such as Boustead and Tat Hong have their own IR department.

A more effective way of getting your views heard by top management is, of course, to attend the AGM and/or EGM. I've always found that I can engage the top management in conversation to ask about the latest developments surrounding the company, as well as to find out about the company's plans for the future. Most companies have Management teams which patiently entertain all shareholder queries, which is a very good thing indeed. However, whether any suggestions by shareholders on how to run the business are taken seriously or not is in question, as minority shareholders are not assumed to know enough about the business to be able to contribute anything constructive. This I am fully aware of, but I feel that during such unprecedented times, Management should remain open to constructive suggestions and filter out the bad ones; as they themselves may be facing problems in growing their business.

As a shareholder who studies the business intently, I would very much hope that any suggestions which I make can be seriously considered so that Management can take the best measures to enhance shareholder value. This would indeed be a synergistic co-operative effort by both Management, Directors and Shareholders !