Crafting an investor relations-friendly social media policy
Published on November 3rd, 2010 by Lisa Davis
Regulating employee use of social media is no easy feat for an organization, but with increasing frequency, companies are finding out just how critical it is to mandate the behavior of those they employ when it comes to their activity on Facebook, Twitter and other social sites. Tweets, posts, comments and opinions shared by an employee can reflect directly on the company they work for, positively and negatively. For publicly traded companies, there can be even greater risk of exposure and negative repercussions if employees inappropriately share material news or make comments that breach the rules of fair disclosure.There is little doubt that social media is reshaping disclosure and the practice of investor relations, so a sound social media policy that is understood by all employees can help protect the company and its investors.
In partnership with IR magazine, Marketwire recently published “Facebook and Twitter: What IROs need to know,” a social media guide for IR professionals. Within the guide is a simple but helpful checklist for an IR professional looking to create a social media policy.
Here are some items to consider:
- Determine who speaks on behalf of your company. It’s best if the individual is dedicated to this role exclusively.
- Establish a system for approving content before it’s posted. Some companies want marketing, PR, IR and legal to vet all comments before they’re published.
- Consider how to provide disclaimers. IR press releases usually come with safe-harbor language or other boilerplate disclaimers about forward-looking information. Twitter doesn’t give an IRO room for such legal niceties.
- Discuss how ‘celebratory’ the tone should be. IR professionals may want to tout positive developments on Facebook and Twitter but this could prove problematic: they need to be careful they’re not making predictive remarks about performance.
- Think through how you link to third-party content. Linking might be construed as an endorsement or viewed as a breach of objectivity if the company doesn’t link to negative reports as well as positive ones.
- Assess your own corporate comfort levels. Some companies simply aren’t ready to converse on Twitter because they fear selective disclosure or have privacy concerns. Engaging on Facebook and Twitter isn’t necessarily right for all IR departments.
While this checklist is a great place to start, every company needs to create and put in place their own social media policy. There are a number of terrific resources that showcase policies from organizations as diverse as Harvard Law School, IBM and Coca-Cola.
Learn more about how investor relations professionals can build strong stakeholder relations with social media.