More Thoughts on Social Media and Investor Relations

The Fleishman Hillard "Pros & Conversation" Webinar on this topic featured Paul Argenti, professor at Dartmouth, and Tom Laughran, Senior VP and Fleishman Hillard Financial Communications Practice Global Co-chair. I also got to sit in on the Q&A portion and join the discussion. We had a good turnout, lots of engagement from the audience, and lots of followup interest.

As Social Media continues to increase in popularity for distributing company news and marketing information, it has also naturally become a topic of increasing interest in investor relations. While many IR professionals are taking a wait and see approach to implementing Social Media tactics into their programs, some are strategically incorporating tools such as corporate blogs, YouTube, and Twitter as part of their communications around a company’s quarterly earnings announcement.

Tom and I have been thinking about Social Media and IR for several months now, in response to a growing interest among clients and prospects. Social Media is a hot topic for IROs, as it is for many other communications professionals. In fact, the National Investor Relations Institute devoted all of their March 2010 IR Update publication to the phenomenon. We at FH have responded to several prospective clients who want to better understand the space and learn how Social Media might be used to better inform, update, and educate investors, analysts, and shareholders.

The investor community has long exhibited similar traits to what we now call Social Media in the Web Age.
• Community is hungry for information
• Certain individuals are highly influential and put out advice that is eagerly consumed by many
• Investors are susceptible to rumor, hearsay, and innuendo that is often relayed quickly or triggers immediate action

The difference today is that internet technology has increased the speed of communication and the spread of the audience.
· Market impact can happen very quickly
· In previous years, impact might have been localized and kept minimal
· Crisis situations can spread globally in a very short time

Key takeaway: at the very minimum, it is important to be monitoring the online conversation and be prepared to act if a crisis arises or if misinformation is being spread. Listening is as important as speaking.

Another key realization is that your company may already be speaking to the investor community via Social Media, and you as the IRO need to know about it. ANY communication from your company falls under Fair Disclosure regulations.
· Marketing may be running a Facebook page and engaging in dialog with investors without realizing
· Employees are tweeting and blogging about their workplace
· Public relations may be operating a senior leadership blog

It is keenly important for the IRO to be aware of all this dialog and be able to hear and react if an impropriety occurs. Monitoring is the minimum in today’s digital space; you need to be listening even if you are not prepared to be active in the conversation.

Social Media (conversation enabling tools, social networks, content sharing, and open platforms) can be a valuable and important tool for communicating with the investor community, boosting awareness among stakeholders, and increasing value for shareholders.

It is keenly important to meld the understanding of technology and community use of Social Media with a thorough understanding of traditional Investor Relations in order to ensure strict compliance with all regulatory requirements and maximize effectiveness of the program. I think that's where B2B Digital strategists can really bring value, mixing expertise in the channels with understanding of the business needs.

View recording of the Webinar: “Investor Relations and Social Media: Analyzing the Investment”

Buy Paul Argenti’s book, “Digital Strategies for Powerful Corporate Communications”