Digital Media Versus Shareholder Communication

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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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