IROs and social media – a tenuous relationship
Earlier this year, a group of 60 senior-level investor relations officers (IROs) gathered at IR magazine’s invitation-only West Coast Think Tank in Palo Alto, Calif. to discuss pressing issues and trends affecting their profession. Hot topics included equity research challenges, say-on-pay, trends and pitfalls in disclosure, and working with various stakeholder groups.
The first issue in the discussion on disclosure was “The State of Social Media and IR.” Panelist Darin Wolter, Marketwire’s EVP, global sales, asked a question of the audience: “How many of you represent companies that have a social media policy”? Only a very small number of attendees raised their hands.
Except for some early adopters – usually large, well-resourced firms – public companies and social media still tend to mix like oil and water. It’s not that IROs aren’t technically savvy. They know that more that 50 percent of institutional investors read financial blogs and that social media influencers can drive stock activity. The fact of the matter is, those things are exactly what they are afraid of. Any slight communication slip could wreak havoc, both for the individual who tweets or blogs something seemingly innocent, and for his or her company. An attendee from a smaller public company said that if there is no answer to a comment on a corporate blog for a couple of days, followers assume the worst and conjecture that there is something the company is trying to hide. In fact, the blogger may be on the road, busy or out sick. A case of limited resources.
On the positive side, the use of social media use among investor relations professionals is growing, albeit slowly. One public company in attendance that actively uses social media designates and certifies employee bloggers who are required to stay on top of the latest product messages and communication policies. Another encourages its staff and management to use social media as a way of reaching out to customers, analysts and portfolio managers. Facebook, Twitter and YouTube can all play a supportive role by adding additional detail and color to material information after it is officially disclosed, helping stakeholders better understand the company.
With the overwhelming influence that social media has on all of our lives – including investors, analysts and portfolio managers – it will only be a matter of time before investor relations professionals find more creative ways to leverage this powerful conversation channel. We’d love to hear how your company is using social media.
Ask the Expert Video Interviews
We asked participants to offer their opinions on issues impacting the investor relations officer. Here are a few of them:
- Greg Secord, Vice President of Investor Relations, Open Text discusses how his organization is using social media to reach out to customers, analysts and portfolio managers. Watch the video clip.
- Peter Shankman, CEO, The Geek Factory talks about how companies that are open and “out there” with their social media tend to have a higher rate of transparency. Watch the video clip.
- Tom Johansmeyer, Group Marketing Director, IR magazine says that his organization uses social media to directly reach out to IROs and other IR-related professionals. Watch the video clip.
- Chris Evanden, Sr. Director, Investor Relations, NVIDIA discusses how his organization monitors and correct erroneous online chatter. Watch the video clip