Industry Future
13 June 2022 Financial Analysts Journal Volume 78, Issue 3

Shareholder Democracy, Meet Memocracy

  1. William Goetzmann
Social media is becoming an important coordination mechanism for investor concerns and actions. Could these changes lead to a shareholder democracy or a “memeocracy” dominated by social media influencers?
Read the Complete Article in the Financial Analysts Journal CFA Institute Member Content


Investors are increasingly concerned with non-financial dimensions of corporate behavior. Investment companies large and small are aware of this and have begun to more clearly articulate voting positions on stakeholder issues, and to explore how to facilitate voting options that further empower investors. This movement towards shareholder democracy, or at least representative shareholder democracy has much to recommend it; investor voice and advocacy can improve governance, inform management and align firm behavior with investor values.

On the other hand, the “meme” stock phenomenon raises the possibility of a new, coordinated market for corporate ownership and new mechanisms for corporate governance. Social media platforms have become, for millions – perhaps billions – a primary forum for personal engagement, alignment of opinion and coordination of action. This empowerment of opinion and the rise of media influencers will almost certainly pose challenges for investment managers, especially those who are fiduciaries.

Will companies become “memocracies” owned and governed by ideological social media communities? If so, is this good or bad for companies, shareholders and society?

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