Is social media killing the shareholder model?

One of the biggest stories of the past 10 years or so is the amplification of people’s individual voices by social media.

In the past, company directors used to worry largely about what shareholders thought and, to a lesser extent, regulators. Facebook, Twitter, YouTube and other social media channels have changed that.

Reputation risk has suddenly become a burning issue. Good communication is now needed to deal with public expectations on a wide range of topics – the environment, diversity and so on.

In fact, recent changes to the way companies will have to publish the difference in pay between those at the top and those at the bottom of the scale threaten to bring matters to a head.

In Enterprise Risk, the magazine we publish for IRM, we like to opine on these longer-term trends. In our Toffler page – named after the futurist Alvin Toffler of Future Shock fame – we ask in the most recent issue whether the shareholder model is on its way out.

Privately, that is what some of the big thinkers in the large professional services firms think. Who will win between the voice of the people and traditional investors is an open question.

You can read Toffler here.

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