Thinking a little more about investor relations engagement in social media (or hesitancy to engage), I believe IR people should step forward and offer some leadership in strategy and policies for corporate and employee involvement in the interactive Web. This is not to say take over, which IROs don’t have time to do and other departments would resist. But offer input, show thought leadership.
This issue came up today among IROs in a webinar on social media and IR organized by Bulldog Reporter’s IR Alert. I spoke on the panel but thought I would pull some thoughts – and resources – together to offer readers of IR Cafe.
Two compelling reasons for IR to lead internally and help shape the strategy:
The message. I think of IR as one of the keepers of the corporate brand. Who are we, what’s our story, what do we mean as a company, how do we create value in the world? The CEO, of course, is communicator-in-chief. But the IRO should be nearby, helping to clarify and deliver the message.
Yes, I know – the products are where the money comes from, so brand managers and marketing communications people often drive the agenda for media of all sorts, which now include Facebook, Twitter and the like. Most social media efforts spring from marketing, customers service or PR.But consider the audiences.
But communication strategy has to flow from understanding our audiences. We have customers, who may be learning about our products – or talking about them to friends – on networking platforms. We have employees, who may be talking about work and the company on social media sites. And we have investors – the IR audience – who own the company, after all, and increasingly are using social media to learn about it, in addition to the company website and traditional sources.
Go to search.twitter.com, a small but easy window into social media, and look for your company or big products. When I do this, I find a significant amount of chatter is on financial matters – investors trading links and opinions. We need to be sure the corporate story, the value-creation story, is reaching these audiences.
The risks. One role of IR within a company is to play gatekeeper – to be sure no one blabs the material information before the company properly discloses it to broad audiences. The IRO is, among other things, a Regulation FD gatekeeper.
Do we need to say what the risks are in social media? It’s a wild and woolly space. Consider the confidential information an employee might let slip, unthinking: We’re all excited about this new product that starts shipping November 1 … Everyone’s afraid of losing their job, because sales have just been tanking this summer … My division is being combined with this other one … The CEO had a heart attack.
I’m no lawyer, but what I’ve heard from several attorneys – including Ben Orlanski of Manatt, Phelps & Phillips on the webinar today – is that the same securities laws and SEC rules (reg FD!) apply to social media as everywhere else. So IROs should be involved, both in developing policies and in day-to-day activity, to guard against selective disclosure by the company – in Web 2.0 as well as other forums.
The other social media risk IROs talk about is the crisis. What happens when rogue employees post a YouTube video doing gross things with your pizza? Or angry soccer moms start tweeting and Facebooking about your TV commercial? Social media platforms spread information – true or false – rapidly and uncontrollably. That pizza video reached 1 million-plus viewers in three days, and investors were in the audience - the stock price dropped 13% (it has recovered). Crisis management is a topic unto itself, but the risk is reason to be prepared.
How to lead. As with so many areas of corporate policy and strategy, the influence of an IRO or outside agency is mostly informal – getting up to speed, reaching out internally to build support, be an active participant in a team. In the case of social media, that means working with Legal, Finance, Marketing, PR, Customer Service.
To me, decisions of where and how to engage in social media – blogs, Twitter, Facebook, there are hundreds of channels and tactics – are questions of strategy that each company must answer for itself. And no two approaches will be identical. But the necessity of thinking through the policy issues applies to every company.
Most public companies have disclosure policies, a giant “business conduct policy” and/or an array of policies covering various areas of employee conduct. Social media are relatively new, but already huge. So companies really need to update their policies to cover involvement of the company and employees in Web 2.0.
I’ve scanned some social media policies of big companies. The ones you can readily find on the Web are from tech companies, who have embraced the culture of sharing their information (even internal policies) online. Take a look at these:
I like Sun’s best among these, because of its plain English and subheads that guide the employee through it. Some business conduct policies are too lawyerly for most employees to get the message (or may even spawn little rebellions).
Charlene Li, co-author of Groundswell, has been preaching the “We need a policy” message for a long time. In a post from way back in 2004, she offers a simple example of a blogging policy, with links to more resources. So if you don’t have a policy that includes up-to-date thinking on social media, you need to catch up.
Communicating with the capital market has always been about using different channels to reach various segments of the investor audience, and IR 2.0 is here.
(Some previous posts and resources on this blog: IR 2.0 – A Menu linking to resources by topic, IR Website Checklist of what should be there, Tiptoeing into 2.0 on trends in corporate engagement, Twitter for IR? thoughts, Social media, reputation & IR, and Social media strategies: Talk, listen … or? Or go to the right side of this page, find “Browse by topic” and click IR 2.0 – Web & social media.)
Please comment with your ideas or links to social media & IR policies or resources.
Good news is, we’re all learning together. Have some fun along the way!
© Copyright 2009 Johnson Strategic Communications Inc.
Dick Johnson, seasoned IR counselor & communicator, is president of Johnson Strategic Communications Inc. More info: 
