Corporate Governance Through Social Media

Abstract

Retail investors are vigorously and loudly taking positions regarding corporate governance issues on social media. They are gathering on social media not just to discuss which stocks to invest in but to debate and collectively act on corporate governance-related issues. Propelled by new technologies and social media, retail investor engagement has shifted away from traditional venues like corporate voting and shareholder proposals. Retail investors have opened tens of millions of new brokerage accounts since 2020. These new retail investors, who are largely Millennials and Gen Z’ers, are adept at using technology and naturally gather and obtain information on social media. In fact, a co-author and I created the term “wireless investors,” to encapsulate retail investors who are using commission-free trading apps to invest and social media to source information. These wireless investors are taking advantage of social media platforms like YouTube, Reddit, TikTok, X (formerly Twitter), WhatsApp, Telegram, Facebook, and Discourse, among other venues to transform corporate governance engagement. In "Humanizing Corporate Governance," Caleb Griffin tackles the issue of amplifying the voice of human investors. He proposes much needed reforms to encourage the engagement of retail investors, arguing that although retail investors care about how companies are managed, they are often kept silent due to structural barriers. Although structural barriers do impede engagement and reforms to the system are necessary, this brief response to "Humanizing Corporate Governance" utilizes a case study of one particularly illustrious event involving AMC Entertainment Holdings, Inc. to show that retail investors are anything but silent. As new retail investors continue to enter the market, particularly from the Millennial and Gen Z generations (with Generation Alpha soon to be joining them), the future of corporate governance is in the hands of these new investors, which means it is on social media. It is time to meet retail investors on social media so that corporate governance can be humanized.

Keywords: corporate governance, social media, internet, retail investors, Millennials, Gen Z, GenZ, Generation Alpha, Reddit, TikTok, Facebook, YouTube, Twitter, X, Elon Musk, AMC, collective action, technology, GameStop, investing, Robinhood, trading apps, short squeeze, decision making, engagement,

JEL Classification: K2, K20, K22, D31, D7, D70, D71, G3, G30, G34