How to Convince Our Shareholders Not to Sell Us?

Being given the opportunity to grow a company as the new CEO can be exhilarating. But what do you do when war erupts and the whole world turns upside down?


The Context 

In February 2022 Karla had been in her new CEO role for less than a year when Russia invaded Ukraine and all hell broke loose in Eastern Europe and Central Asia. With the public opinion and investors pushing companies to exit Russia, Karla’s position and company became fragile overnight.

“We have a great strategy. I am finalizing the composition of our executive team; we have never had so good people in key roles in our company. And this market is only about to take off. I know we can grow and deliver massive return on investment for our shareholders. But what can I do to convince them not to sell us before we even got a fighting chance to show what we can?” she asked.

The First Step

Karla’s saving grace was that her business was not based in Russia; it was located in a former URSS satellite that now  ran a thriving economy on its own.

And Karla was right – this market was just about to take off. From what she was describing I could recognize Romania of the early 1990s, when few investors gave my country of origin a fighting chance. 17 years later, when Romania entered the EU, everything changed – and the country is now looked up at as a model of digital development by numerous emerging economies.

So, the first thing that we needed to do was to identify Karla’s shareholders’ real fears.

“Our shareholders have already decided to exit a few difficult, politically charged markets. My greatest fear is that they will put us in the same basket, even though our market conditions are rather different,” she said.

To top Karla’s concerns, some social unrest got people in her country on the streets. From the outside, everything looked like the country was unstable and, indeed, it should be exited as soon as possible.

“So, what are your shareholders really after?” I asked her.

“They want solid returns on investment, of course. But they also want to come across as a good, solid, ethical global business. I’m afraid they could decide to sacrifice us not so much because of financial reasons, but for perception reasons. I sense that they need to send a strong signal to the rest of the business that they are ready to do the right thing,” she told me.

“So, how could we show them that staying in your country is the right, ethical thing to do?”

This was our challenge – to build the case to stay. And the answer was in the company and in the market numbers.

The Second Step

Once we clarified what needed to be done, Karla and her team got to work.

They collected company data showing real progress in major business indicators. They collected competitor data, showing how her company fared better in many key areas. Last but not least, they collected market data that showed with relative reliability where her country’s economy was headed, war or no war.

Data was great, but we also needed to identity the right people to carry this message.

So, Karla’s team reached out to external stakeholders – the local national bank, several international economic think-thanks etc. They did interviews with these people and created a short-and-sharp collection of positive points of view showing where her market was probably heading in the upcoming years.

Once they felt comfortable with their case, it was time for the major breakthrough – inviting their shareholder team for an official visit and case presentation.

The Breakthrough 

Karla knew that everything was riding high on this official visit. So, she prepared and they prepared.

They mapped the schedule to seconds; everywhere where they could, they embedded success stories of their clients, their company, and their country.

During the official visit, a member of the board of the local national bank came to speak. He shared their public intentions in terms of monetary policy, and the perception of country risk. The executive team took turns to speak. Each speaker showed thoughtfulness in assessing the business – both in terms of potential and risk mitigation.

At the end of two days, everyone was exhausted. But what needed to happen happened. “Given the circumstances, we consider it wise to give you more time as we consider our next step. Let’s see how the situation unfolds and how it will look like a year from now,” the key shareholder representative told Karla upon their departure.

The Resolution 

Karla knew that what they had gotten was not a carte blanche to fall asleep on their laurels; by the contrary.

At the end of the fiscal year, when Karla went to the company headquarters to present their results, everyone applauded. Karla’s company was in the TOP 3 across all performance indicators in all markets where the group operated, with several instances of being the market leader.

Karla reiterated their commitment to thoughtful risk mitigation and management. The final confirmation came when the group owner told her: “You achieved in one year what the previous team could not in five years. And this under conditions of war and market volatility. You surprised us all. Keep on the good job.”

Karla’s attention to details and commitment to risk management gave her company the fighting chance they needed to show how good they really were. But it was Karla’s empathy and capacity not to take things personally that preserved her critical distance and helped her shield her company from an emotions-based abrupt market exit. Two years later, the company continues to thrive. For Karla – and, as it shows, for her company, too – this was the real right thing to do. 

Let's Talk

Are you a woman CEO confronted with exceptional shareholder pressure? Are your shareholders pushing you and the business in a toxic direction? Could you use some critical distance to identify your real crisis and to leverage empathy to engage your shareholders in a constructive dialogue?

Let's Talk

Are you a woman CEO confronted with exceptional shareholder pressure? Are your shareholders pushing you and the business in a toxic direction? Could you use some critical distance to identify your real crisis and to leverage empathy to engage your shareholders in a constructive dialogue?