So the SEC has spoken. And it was no big surprise, you can use social media to fairly share material — and I assume non-material — information. I’m not talking about what your CFO is having for lunch, or which P90X workout he did today. It’s those pesky little comments, like “The quarter looks great!….we’ve got a big announcement coming!” or even more subtle comments like, “today sucked at work” or “I’m heading to Palo Alto today,” that could spook or inspire investors.
I’ve spent time working with CFO’s who were still trying to figure out email, and CEO’s who refused to carry a smart phone, but I’ve also had to deal with colleagues who were so passionate about their latest triumphs that they wanted to tweet and Facebook them to the world.
As a head of financial communications compliance and or IRO, you need to make sure you work with your HR and IT teams to have a clear policy in place. It’s not the policy, it’s the cascading. Everyone (except evidently some KPMG or McKinsey partners) knows they can’t share inside info, and by now, your policies should be clear on what is and isn’t material. Now you need to work together to cascade perpetually.Take the chance of the next employee event to reinforce the message. And the one after that, and the one after that. You get it.
Finally, get your IR site together. Why is it that IR web sites are mired in the 1990’s. It looks like everyone is letting their legal teams design the darn things. Are you trying to tell you investors they’re boring. Get a blog designer in and stop worrying about paying for that “real-time stock feed” anyone can get off CNBCrt, and integrate in your social media; Facebook, key twitter feeds and look into company news aggregation.
Then you need to monitor. Make sure you or one of your staff are searching daily your Twitter trends, checking Facebook mentions, Pintrist, so on and so forth. Just checking your mentioned on Seeking Alpha or the Motley Fool won’t cut it anymore.
Most importantly is to encourage employees to participate in the cyber discussion, but within the bounds of age-old rule, don’t break fair disclosure. Find a nice way to highlight positive input on your internal portal or intranet sites, and also find a soft touch to remind people who are skirting the edge. Companies that implement militant fascist enforcement only drive associates into anonymous screen-names, and too often make them their biggest critics.
The key is that financial communications needs to be able to take all these disparate channels and put them in one place for the investor. Don’t stifle speech and don’t stick your head in the sand. If you’ve been in the business for more than 10 years (remember fax alerts) take this chance to empower the next generation of IROs. Let them scan the obtuse forums task them to teach you how to get up to speed.