Are IR pros ready to get social?
Uncertainty has kept many investor communicators on the sidelines, but now may be the time to review how social media can strengthen your IR outreach. On April 2, the U.S. Securities and Exchange Commission (SEC) issued a press release stating that companies may use their corporate social media accounts such as Facebook and Twitter, “to announce key information in compliance with Regulation Fair Disclosure (Regulation FD).”
This new guidance is similar to the guidance issued in 2008 which addressed the use of corporate websites for disclosure purposes. Individual companies are free to decide if the use of social media for material disclosure is appropriate but only after a careful Regulation FD analysis. The guidance emphasizes the importance of issuers examining “rigorously the factors indicating whether a particular channel is a ‘recognized channel of distribution’ for communicating with their investors.”
The NIRI publication, IR Update has reported that some investor relations officers have voiced their support in favor of using social media to disseminate their message to larger investor audience. The most obvious manner in which these tools would be employed is through use during webcasts and, conference and earnings calls. Some companies are currently testing the water by using social media to facilitate Q&A before calls or to post tweets during calls.
This is not to downplay the need and importance of traditional SEC filings and wire services. These channels of information distribution serve an important role and should continue to receive the utmost attention. In fact, IROs have noted that we are only in the initial stages of using social media for IR purposes; nonetheless there is an acceptance that this important channel is here to stay. This is evident in one IRO who tweets during conference calls to inform those analysts and investors who either can’t attend the call or obtain real-time access to the transcript. A poster child for the integration of social media into the IR world is eBay’s IR representative. The internet giant’s IR representative posts to the company’s blog a notice that he will be posting real-time blog posts and Twitter updates.
Here are a few thoughts on how to employ social media strategies for IR audiences.
1. Ensure you have the best set of partners on your team. Stepping into the social media practice takes time, effort and a plan.
2. Allocate resources toward social media in 2013, even if it is to assess the need, develop a policy and applicability for your company, its reputation and brand attributes.
3. Partner with your disclosure team consisting of legal, regulatory, marketing and clinical teams to develop your approach for SEC and regulatory compliance purposes.
4. Start small. Monitor what others IROs are doing and learn from others both in your industry and those who are successfully practicing these techniques in other sectors.
5. Build your case. Show your management team examples of companies that are employing social media for IR purposes. Your IR and communications agency partner can do this for you. Then, determine the best approach for your company based on target audience, market cap and reach.
SEC Press Release:
SEC Report of Investigation:
SEC Interpretive Release on the Use of Websites:
NIRI Standards of Practice:
NIRI will incorporate this development into its planned 2013 revision of the “NIRI Standards of Practice – Disclosure.”
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