Richard Torrenzano
Richard Torrenzano

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently,” Warren Buffett’s words more than 20 years ago.

That was when artificial intelligence (AI) was just glamor in the eye of Geoffrey Hinton, British computer scientist called the Godfather of AI.

Fast forward to today, and those five minutes Buffett warned about could stretch into a nightmare that torpedoes your company reputation, stock price or sales for years.

Handshakes and quarterly earnings reports alone won’t cut it anymore.

Today’s reality is stakeholder engagement in the age of AI, activists and ESG

All can dramatically alter a company’s trajectory.

In modern financial markets, AI-driven algorithmic trading is accelerating rapidly. The companies that succeed are those that not only understand but also embrace change.

To stay competitive, businesses must align their strategies with the expectations of investors and all stakeholders. Do this right, and your stakeholders might even like you—for at least a quarter or two.

Toss out the old playbook faster than yesterday’s stale boardroom bagels.

Following are some shifts that most faced in the last few years:

Environmental, Social, and Governance (ESG): are more than words in headlines. It is now part of investor decision-making – as well as employees and customers alike – and companies that fail to address these issues risk losing critical investment.

It’s no longer just about positioning … but a core component of long-term viability. Younger generations and large institutional investors alike are leading this charge. Spoiler alert: reporting on non-financials is a new reality and could all substantially change with the U.S. November presidential election.

Shareholder Activism: Less Champagne, More Hand Grenades: was a real disruptor in 2023 and 2024, shaking up boards more than AI and ESG combined, turning investor relations into high stakes contact sport.

Investor communications and relations was high stakes contact sport … and is likely to intensify in 2025.

Activist investors are no longer content sitting on the sidelines; they’re stepping in with demands for governance changes, sustainability improvements and leadership overhauls.

Notable examples in 2024 is Bluebell Capital targeted BlackRock, criticizing its ESG strategy and calling for new leadership. These campaigns consume significant management time and come with steep costs.

Salesforce had to invest heavily in restructuring, while Shell had expensive legal consultations and potential operational splits.

Disney, too, saw Nelson Peltz push for strategic cost cuts and a revamp of its content strategy.

Addressing concerns promptly and anticipating next moves can mean the difference between maintaining control of a company’s direction or losing it altogether – possibly even a board member's seat.

By 2027, self-driving cars will be so advanced, they’ll refuse to take us to the office!

The next three years will be a whirlwind of change, and only those who innovate will thrive.

Rapid advancements in technology, shifting market demands and evolving stakeholder expectations will challenge everyone.

Here’s a glimpse of what's ahead—and why it matters. These changes will reshape industries, work, and how we connect.

Hyper-personalization: who doesn’t love a sales pitch that knows your pet’s name?

Stakeholders, much like customers, expect personalized attention. Each stakeholder group is crucial to success, though not always recognized.

Employees drive operations and rely on job security. Investors seek returns, while customers directly influence revenue through satisfaction. Vendors and suppliers ensure smooth operations, and regulators enforce legal compliance. Media, government, and community leaders shape public perception. Special interest groups push for specific causes, and even competitors impact the market.

Managing each group’s interests carefully is key to maintaining stability and trust. Companies that succeed in this will build deeper relationships with investors, employees, and customers—gaining a serious competitive advantage.

AI is the business partner you didn’t know you needed (or frenemy you’re avoiding)

AI is essential in today’s fast-paced business world. AI processes vast data, predicts trends and provides real-time insights. Boards and C-suits using AI make swifter decisions, forecast more accurately and respond to market shifts immediately.

The choice is clear: embrace AI or be left in the dust.

Virtual shareholder meeting (VSM): who needs ballrooms when you can zoom in shorts

The pandemic may have pushed everyone online, but virtual and hybrid shareholder meetings are here to stay.

Formats offer greater inclusivity, allowing investors from anywhere in the world to participate with no travel or expense. The ability to engage in real-time Q&A sessions with shareholders online? That’s a real game-changer.

A Broadridge news release in September 2024 notes companies and shareholders are continuing to see benefits of virtual meetings.

At the height of the pandemic, the number of virtual-only meetings reached an all-time high, and few companies are returning to in-person-only formats. In the first half of 2023, there were 1,815 virtual-only meetings, just slightly down from 1,832 in 2022 and 1,891 in 2021.

Power insights to wow stakeholders and conquer markets

Embrace long-term value: Stakeholders are done with the short-term games—they want long-term strategy for sustainable growth. If you can’t sell that vision, expect investors and employees to walk.

Be transparent or get scrutinized: Transparency is no longer optional. Stakeholders demand frequent updates. Control the narrative with regular updates, news releases and social media posts, or misinformation will fill the gaps.

Leverage social media for all stakeholders: social media isn’t just for influencers. Platforms like LinkedIn and X are essential to engage stakeholders, share achievements, and build trust. In an AI-driven world, one misstep can trigger market volatility. Balancing open communication with controlled messaging is key.

Evolve or become a cautionary tale in new digital era of stakeholder engagement

Stakeholder engagement is undergoing a massive transformation. The rapid integration of AI and increasing activist pressure have made the business landscape more dynamic than ever.

Corporate leaders, stakeholders and strategists now face higher risk and stakes in navigating this evolving environment.

The clock is ticking. Those five minutes Warren Buffett warned about. They’re slipping away.

For many more articles on AI, communications and reputation: https://torrenzano.com/news/

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Richard Torrenzano is chief executive of The Torrenzano Group which helps organization takes control of how they are perceived™. For nearly a decade, he was a member of the New York Stock Exchange management (policy) and Executive (operations) committees. His new book will be released this fall: Leadership Playbook: AI and Communications Strategies for CEOs & Boards to Strengthen Stakeholder Engagement.