Two worlds colliding: Social Media and Investor Relations

Posted by on February 13th, 2012

Two year ago, social media was a “nice to have” in a communications plan.  Now – it’s a “must have.”  However, for Investor Relations professionals, the rules are different.  Actually – it’s more than that. The rules on best practices for using social media to communicate with investors have not even been discussed let alone set in stone. So when I discussed with my publisher the writing of a second edition of my book (Investor Relations: The Art of Communicating Value), I knew that I needed to address the issue of social media.

When I wrote the book back in 2004, the issues we faced were Sarbanes Oxley, RegFD and understanding the best practices for creating the IR section of a company’s website – one that would effectively communicate the company story to investors while complying with the then new paradigm of communications – i.e., the Internet.

The new paradigm in communications, less than ten years later, is social media.  For the most part, all public companies now have an IR section on their corporate website (and if they don’t, chances are they don’t have much of an investor following).  This is not the case with social media.  Publicly traded companies are only beginning to test the impact of communicating with investors via social media channels.  Nevertheless, it is my belief that in the not-to-distant future, use of social media will be as mundane as having an IR section on a website.

Some very respected companies have already embraced social media with open arms.  Consider the success of Dell Computers.  It has embraced social media for investor relations and has created a thriving DellShares social community to support its IR efforts.  All of the sudden, in the blink of a Tweet, post or upload, vital company information can be shared with thousands of interested investors or soon to be interested investors.

So how can we harness the power of social media while not leaving companies vulnerable to regulatory scrutiny with respect to disclosure?  This is what we will explore in the coming weeks and months both here in KCSA’s blog, and also at a Social Media Week workshop this Thursday, February 16 at 9:00am at KCSA’s New York Headquarters.  Space is limited; please RSVP here or email social@kcsa.com if you are interested in attending.