Inspiring stakeholder confidence in times of uncertainty

THE term Vuca (volatility, uncertainty, complexity and ambiguity) was introduced close to 40 years ago to describe the complex macro environment that the world was in then. Today, Vuca is arguably more pronounced than ever. For businesses, uncertainty is perhaps the biggest challenge – one that is most difficult to prepare for or respond to, and yet a burning concern on many shareholder’s minds.

The upcoming annual general meeting (AGM) season is an opportunity for boards and management to demonstrate that they are not just responding to disruptions but are proactively anticipating changes and acting intentionally to shape the future of their organisations.

To do so, they need to communicate a compelling narrative on the company’s long-term and strategic plans and inspire confidence among stakeholders.

Pivot agilely to winds of change

Globally, the escalation of geopolitical tension is impacting trade, supply chains, business operations and economic activity. That said, the current local economic outlook shows spots of optimism. There is continued labour market resilience, consumer spending strength and stronger productivity growth. However, companies remain subject to the risks of elevated global inflation and potentially weaker growth amid shifts in the geopolitical equilibrium.

At the AGM, stakeholders would want to hear how the board and management are building agility and resilience in the company’s operations such that they are both seizing opportunities and managing risks. Explaining the company’s risk management posture and demonstrating that there is continuous horizon scanning and risk monitoring are important.

For example, it will be useful to articulate how the company is investing in data analytics and technology to augment its risk management capabilities and in detecting, mitigating and responding to material risks. Also, insights into how the chief risk officer and other members of the management are collaborating to proactively manage risks before they escalate, and how effective board risk oversight is enabled, will be valuable.

Invest differentially for the long term

Many companies have entered 2025 prudently with a strong focus on capital conservation and cost management. However, companies cannot afford to let financial caution hold them back from necessary investments for long-term growth, such as those related to technology and sustainability. It is therefore necessary to communicate how management is strategically reducing costs while reinvesting capital to develop capabilities to support growth.

Given how artificial intelligence (AI) – and its evolution into more advanced forms such as generative AI and agentic AI – continues to capture the world’s imagination, stakeholders will be interested to understand how the company is harnessing the technology’s potential for growth and innovation. Stakeholders are also increasingly concerned about the ethical implications of AI technologies, prompting them to ask critical questions regarding the governance of AI use in the organisation and in decision-making.

Sustainability is another area that is material to creating long-term value and strength. It is hard to disagree that climate action is an enduring imperative. While companies may be moved in the short term to pause sustainability-related investments given current geopolitical and financial headwinds, companies that can keep their sights on the long game set themselves apart.

According to the 2024 EY Global Corporate Reporting Survey, stakeholders are increasingly focusing on non-financial drivers of value, with over 80 per cent of finance leaders surveyed in Singapore saying they have noticed investors asking more questions in this area than two years ago. Those that show a commitment and road map to achieving sustainability goals and robust non-financial reporting will hence be viewed more credibly and favourably by investors for their long-term strength.

Turn talent complexities into an advantage

The talent landscape has seen significant shifts in recent years. Today, workplaces are seeing five generations working together. This adjacency is highlighting the differences in experiences, skills and outlook, just as technology is accelerating the pace of change and bringing all generations closer together. The opportunity to harness diverse skills and viewpoints across generations has never been greater, notwithstanding greater complexities.

At the same time, technology such as AI is morphing job roles and demanding new skillsets of the workforce. This brings renewed focus on reskilling, productivity and the company’s talent attraction and retention strategy in a competitive market. Stakeholders will be keen to understand the nexus between investments in technology transformation and workforce development or disruption, as part of overall business strategy.

AGMs can fail to deliver for stakeholders when they lack authentic engagement and transparency from the board and management. Inadequate preparation for addressing pressing issues such as the above can result in missed opportunities for constructive dialogue and building trust. Even as ambiguity prevails in the wider landscape, boards and management can embrace the AGM as an opportunity to communicate the company’s performance and strategy with clarity and confidence.

The writer is Singapore head of assurance at Ernst & Young LLP. The views here are the writer’s and do not necessarily reflect the views of the global EY organisation or its member firms.