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Boards & Shareholders Digital Media Versus Shareholder Communication By Louis Thompson Jr. of Higher Education noted that journalism leen Edmond, and several CEOs have Compliance Week Columnist schools are scrambling to retool their cur- their own blogs to communicate with ricula to focus on the new media. As a re- shareholders and employees. Other T he world of shareholder communica- tions is in a “Twitter” about what to do with the new social media. To tweet, sult “hordes of students” are enrolling at a time when traditional media are in freefall because of declining circulation and adver- companies use blogs to publish expert commentary by senior executives on areas of interest, inviting comment or not to tweet … that is the question. tising revenue. from readers. According to Francine As most Compliance Week readers likely Applications to master’s programs in McKenna, who writes the popular “re: know, the dominant social media plat- the top four journalism schools were up 24 The Auditors” blog, Dell is among the forms (today) include blogs, Twitter, Fa- percent at Stanford University, and 44 per- many companies that maintain inves- cebook, LinkedIn, myriad chat rooms, cent at Columbia University. Yet, in 2008, tor relations blogs. Its “Dell Shares” multimedia sites such graduates in journalism and mass commu- blog sometimes features Webcasts as YouTube, and even nication had far fewer job interviews than with executives on the company’s services such as RSS the year before, and full-time employment outlook, and recently featured infor- feeds and Mobile In- was at its lowest point since 1986. mation on the company’s decision to vestor. So, what’s happening? Obviously, the acquire Perot Systems. Chief blogger For years, companies current generation of university students is Director of Investor Relations Rob- have used traditional has come of age with social media, and they ert L. Williams. media to communicate see opportunities far beyond traditional with investors; more journalism; they view a journalism/com- 2. Twitter. Twitter is a unique plat- recently, the Internet munication degree as an entrée to many ca- form for engaging in two-way com- has become a primary reer fields in today’s digital age. Yet several munication between companies and means for communicating with sharehold- professors quoted in the article expressed shareholders. Because Twitter enables ers through the company’s Website and concern that the focus on the new media is shareholders, the media, and other interactive features such as investor Web- happening at the expense of concentrating individuals to follow and react to casts. The Securities and Exchange Com- on the importance of content. “tweets,” the platform offers rapid- mission, in Regulation Fair Disclosure, I would submit that we have a similar fire outreach and response. However, authorized the Webcast as a means for full challenge in shareholder communications. Twitter limits each message to 140 and fair disclosure, providing it is fully Not only must we confront the issue of characters, so long communications accessible and investors are notified of its whether to use social media, but we must with legal disclaimers are impossible; availability in adequate time. do so without losing control of the content most companies use the platform to Two years ago, the SEC urged com- of our messaging, and without subjecting make brief announcements, alert- panies to create shareholder e-forums, so ourselves to the liability of selective disclo- ing investors that new information is long as they were not used for proxy so- sure.
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