Thursday 22 February 2018

Tweet to the Street: Balancing Social Media and IR

Originally posted on

When to tweet to the street? It’s a common question we are asked by clients that are publicly traded. Given a great number of investors are now educating themselves and making their investment decisions using online tools and portals, and then sharing their insights and choices far and wide, we believe it’s important to consider social media as a powerful IR tool. What is stopping many companies from embracing these tools is: A. fear and B. misconception.

Let’s tackle A. fear. A company thinking about social media and IR needs to be ready for the multi-way communications environment social media invariably creates. Instead of using a one-way channel that many publicly traded companies are used to, where information is pushed out through traditional channels and then choosing when, where and how they respond with the hopes of containing or controlling commentary that might impact the share price. Through social media, companies are now exposed to comments, criticisms, challenges and debates in a very public way. Engagement is important, specifically determining when you will engage, and on what topic, or whether you will simply monitor the space. Individuals are in all likelihood already talking ABOUT you, WITHOUT you. Joining the conversation allows you to not only monitor what is being said but also to clarify misconceptions and share facts, demonstrating you are aware, engaged and willing to participate in dialogue with shareholders and the public. It is a good idea to evaluate posts with an eye to whether the issue is an IR or PR issue, or perhaps both, and respond accordingly, using proper tools and approved processes. An added benefit, social media also helps publicly traded companies fill the gap in between official news, encouraging conversation about the industry, trends or products, keeping companies on the radar screen of investors, analysts and shareholders in an innovative way and positive dialogue, in most instances, reflects well on share prices.

Moving to B. misconception. Disclosure requirements and regulations are an important consideration for publicly traded companies, ensuring you are not sharing material information or data on a single platform when full disclosure across all public channels is required. This doesn’t however apply for broader general conversations about your company, your industry or your products that use publicly available, previously disclosed information. Conversation can occur using key messages and materials the same way it were to occur in the one-way model, but with a broader audience and more interactivity. We still suggest traditional tools and approval processes are important here and suggest social media can enhance your ability to reach and influence audiences, who will then carry your story farther afield for you, economically. As long as what you are disclosing (if material) has been approved by regulators and reaches a broad public audience, at the same time, you’re in compliance. For example, if you are issuing a press release, posting a tweet or Facebook post about it leading back to the source needs to happen simultaneously to ensure all shareholders, current and potential are hearing or seeing news at the same time, on a level playing field. This is meeting compliance, but is also adding value and reaching current and potential investors and shareholders in a new way, in spaces they may be in for other purposes. Examples of other innovations using social media tools could include anything from hosting a virtual AGM in addition to your in-person meeting, allowing mobile electronic proxy voting or tweeting earnings results while the information is being shared via conference call.

As always, a fulsome strategy that outlines the resources for and the what, when and how responses will be created, approved and disclosed is key to being successful in the space. Of great importance is designating a point person from your IR or communications team that understands regulatory compliance to execute your strategy and pose as your public “voice” will also help ensure risk is minimized. Policies and procedures for how others in the company interact in using social media as employees is also critical. For anyone who is considering a step into social media and in particular, those who aren’t quite ready to step into the fray, we do suggest a period of time where clients simply monitor the online space to research and understand more about what is being said about them that will help them determine if social media is right for them and then guide their strategy development (read Say Nothing Right Now, But Keep Your Options Open here)

In short, we strongly believe social media, done right with strategy and planning, adds investor value. Demonstrating an openness to dialogue and transparency in conversation, will lead investors to think more confidently about you as you show a willingness to take a risk and step outside of what is expected.

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on Monday, February 7th, 2011 at 2:09 pm and is filed under Home Page, Perspectives.
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  • ground penetrating radar

    I tend to agree with the writer here, social media is surely a power full tool of IR.