by Julie MacMedan, Vice President of Investor Relations, Demand Media
You may have read about what I’d like to call “the tweet heard ‘round the world” – or at least, “the tweet heard ‘round the Street.” On May 14, 2012, public company Francesca’s Holding Corporation announced the firing of its Chief Financial Officer based on a finding that he improperly communicated company information through social media. http://on.wsj.com/JcJeJ1 During the company’s Quiet Period ahead of announcing quarterly results, the CFO tweeted “Board meeting. Good numbers = Happy Board.” Once learning of the CFO’s tweets, a shudder ran down my spine as I suppose it would of any self-respecting Investor Relations Officer (IRO). “How could he have been so reckless?” “How many glasses of wine did he drink before that tweet?” “OMG” were some remarks shared in consternation with fellow practitioners.
Social media is becoming increasingly important not only for marketing the company’s products and services, but also enhancing its corporate reputation and effectively reaching an over-stretched and increasingly social-media-active investment community. If they’re not already doing so, IROs should be learning how they can use social media to enhance their company’s corporate reputation and investor relations program. As more C-Suite executives become active on social media, IROs should get more involved in helping protect them from unwittingly using social media tools to the detriment of the company’s reputation, and even in violation of Federal Securities regulations.
While the Francesca’s Holding Co. CFO example above is glaringly obvious and easy to address with basic Regulation Fair Disclosure training, what are some of the more delicate or subtle areas of social media communication that IROs can coach public company executives about before they type that first tweet?
Here are some Do’s and Don’ts for executives actively using social media tools:
- Understand that you are representing your company – even if you add a disclaimer that your opinions are not those of the company
- Understand that, most likely, more short sellers than friendly investors are following you
- Use social media to increase awareness of and simplify important strategic and financial news
- Promote and link to company products/websites to drive traffic and interest
- Elevate your personal reputation in alignment with your position at the public company
- Communicate material undisclosed information
- Tweet about travel and meetings if it is not expected or widely known that you would be there
- Disparage a competitor – including commenting on executive departures/M&A deals
- Post “anonymously” to promote your products and services
- Post, repost or retweet information that does not advance the reputation of your company or positively motivate employees, customers and shareholders
Social media tools are an increasingly important way for the C-Suite to advance a company’s reputation and connect with key audiences – including employees, customers, media and investors. IRO’s should not be afraid of social media, they should embrace and encourage it. Approach it as you would any verbal conversation with an investor at a conference or on the phone. After all, that’s what social media is – a conversation.
Julie MacMedan is one of our featured speakers at our “Can I Tweet That?” Social Media in Regulated Industries event, July 30 at the Yahoo! Community Center. It’s not too late to RSVP.