INVESTOR RELATIONS AND SOCIAL MEDIA 1
Reaching Shareholders Online: Trends and Best Practices in Online
Communication and Social Media in Corporate Investor Relations
David A. Hogan, APR
Abilene Christian University
Presented to the International Association of Online Communicators
2009 Conference, Washington, D.C., October 1-2, 2009
INVESTOR RELATIONS AND SOCIAL MEDIA 2
This paper examines how corporate investor relations departments are using online
(Internet) communication and social media tools to communicate with analysts,
shareholders and the general public. It will examine why investor relations
departments have been slower to adopt new media communication tools compared
with their counterparts in corporate communications, marketing and employee
communications. Finally, this paper will explore the future role of online
communication and social media in the practice of investor relations in the years
INVESTOR RELATIONS AND SOCIAL MEDIA 3
Reaching Shareholders Online: Trends and Best Practices in Online
Communication and Social Media in Corporate Investor Relations
A revolution is taking place in how organizations communicate with their
target audiences, both internal and external. The transition in organizational
communications that began with the advent of the World Wide Web and the
popularity of broadband Internet service took a giant leap forward earlier this
decade when several new online services appeared for the first time, including
Myspace (2003), Facebook (2004), YouTube (2005) and Twitter (2006).
Collectively, these and similar new services came to be known as “social media.”
Communications consultant Merrie Spaeth has described the impact of social media
as being even more significant than the advent of earlier new communications tools
such as radio and television (Spaeth, 2009).
This paper will focus on how online communications, and especially social
media, are changing the communication practices of corporate investor relations
departments at public companies of all sizes. It will also examine the question of
why corporate investor relations departments have been slower to adopt social
media communications tools than their counterparts in other corporate
communications specialties and in marketing.
While numerous academic studies exist on the role of corporate Web sites,
the issue of how social media is impacting investor relations practices has not been
explored in-depth in academic research. This is most likely due to the newness of
this phenomenon and the relatively few examples of early adaptors available for
INVESTOR RELATIONS AND SOCIAL MEDIA 4
study until recently among public companies. Appropriately, many of the most
valuable sources for information for this study came from social media itself,
especially from bloggers who write in this space and from Twitter messages
(including valuable links to online resources). Social media sharing tools including
Delicious and Slideshare also played a valuable role in assembling this research.
The Role of Communications in Investor Relations
The National Investor Relations Institute, the largest professional
organization in the world for investor relations officers, defines investor relations as
“a strategic management responsibility that integrates finance, communication,
marketing and securities law compliance to enable the most effective two-way
communication between a company, the financial community, and other
constituencies, which ultimately contributes to a company's securities achieving fair
valuation” (NIRI 2003). It is important to note the emphasis on “communications”
and “marketing” in this definition. Investor relations officers are inherently and
inextricably communicators, no matter what their previous academic or career
backgrounds may have been. Nearly a fourth of all NIRI members engaged in
corporate investor relations work came from career backgrounds in corporate
communications or public relations, second only to “corporate finance” as a career
background (NIRI, 2008).
Of special interest to this study, the NIRI definition describes the role of
investor relations as “to enable the most effective two-way communication between
a company, the financial community, and other constituencies.” Online
INVESTOR RELATIONS AND SOCIAL MEDIA 5
communication, and in particular social media, is ideally suited to helping investor
relations officers fulfill this mission. Social media excels in offering two-way
communication channels and provides investor relations officers with a promising
new platform for full disclosure, transparency and dialogue. Based on this, one
might expect investor relations departments to have enthusiastically and whole-
heartedly embraced social media tools to help them better achieve their objectives,
but such has not been the case.
Investor Relations: Letting Others Take the Lead
The evidence is clear that investor relations is slow in joining the social
media party. A recent study of the Fortune 100 companies in the United States
conducted by McKenna Partners found that “very few companies are delving into
social media for IR” (McKenna 2009). An informal survey of 270 investor relations
officers and chief financial officers, conducted earlier this month by Bulldog
Reporter’s IR Alert, found that only 12.5 percent of respondents use social media to
disseminate financial information to shareholders and the financial markets. Large
companies, defined in the study as those with $500 million or more of annual sales,
fared even worse. Only three percent of large companies use social media as part of
their investor relations communications (Bulldog Reporter, 2009).
An academic study earlier this year confirmed that other institutions are
outpacing corporations in adopting social media. Nonprofit (charitable)
organizations and academic institutions have both embraced blogs and other social
media tools at a higher rate than have corporations. More than half (57 percent) of
INVESTOR RELATIONS AND SOCIAL MEDIA 6
all large charities use blogs, compared with 41 percent for colleges and universities
and only 16 percent for Fortune 500 corporations (Barnes and Mattson, 2009).
Further, only 28 percent of the corporate blogs linked to Twitter accounts, 21
percent linked to corporate videos and only 10 percent linked to podcasts (Barnes
and Mattson, 2009).
This reluctance on the part of investor relations departments to pursue social
media is all the more surprising given that the primary target audiences for investor
relations -- institutional investors and analysts -- are using social media tools for
both business and personal reasons. Intuitively, institutional investors and analysts
would seem to be ideally suited for social media. They are highly educated, affluent
and very mobile. Blackberry or iPhone use is almost universal among this crowd.
Studies confirm the interest of professional investors in social media. The
Brunswick Group, for example, surveyed 455 analysts and institutional investors in
July 2009 and learned that nearly half (42 percent) read blogs and that a
comparable percentage of the respondents said they have followed up on corporate
information found on a blog. Twenty percent of the respondents said information
on a blog had contributed to an investment decision or recommendation. Most
respondents (58 percent) believe social media will become increasingly important
in helping them make investment decisions (Joyce, 2009).
Professional investors already are regular users of corporate Web sites. The
SEC acknowledged this fact in its 2008 update and even said that “in very limited
circumstances” a company’s Web site could serve as “a standalone method of
INVESTOR RELATIONS AND SOCIAL MEDIA 7
providing information to investors … “ (SEC, 2008). A study by the Rivel Research
Group found that 75 percent of institutional investors look for information on
corporate Web sites “weekly if not daily” (Rivel, 2007).
Darrell Heaps, president, CEO and founder of Toronto-based Q4 Web
Systems, made the case in a recent blog post that companies need to recognize that
the quality of their investor relations Web sites and social media may impact
reputation and stock valuation.
"Some think that Web sites are only for retail investors, and if you’re largely
held by institutions then the Web site doesn’t matter,” Heaps said. “In today’s
market, this simply isn’t the case. Your Web site and how you use the social Web
have a direct impact on your company’s reputation and in many cases the value of
your stock" (Heaps, 2009).
Evidence is growing that institutional investors and analysts, already
accustomed to searching corporate Web sites for information, are now turning to
social media. A host of new online and social media services are proving appealing
to these investors. They include Seeking Alpha, which aggregates articles from
financial blogs and newsletters and claims four million unique users per month;
StockTwits, which allows investors to search Twitter messages using stock ticker
symbols; and Wikinvest, a contributor-driven investment research site.
INVESTOR RELATIONS AND SOCIAL MEDIA 8
Not Yet Convinced
While the momentum is growing for greater adoption of social media in
investor relations, not everyone in the profession is convinced of its value. Beth
Kurth, president of Kurth & Company and a former investor relations and public
relations director for a public company, recently said in an online article that
Twitter does not have a place in investor relations. She criticized Twitter as “time
consuming” and a distribution channel that fails to “meet the demands of full
“Twitter doesn’t really matter to IROs because it’s social media,” Kurth said.
“And by definition, social media is not business media. Rather, it is a media that is
designed to be used by friends, pals, buddies and social acquaintances … it is not a
method to disclose material information in a full and public manner” (Kurth, 2009).
John Palizza, a popular investor relations blogger, also questioned the value
of social media in a recent blog post.
“I confess that Twitter and Facebook have me stymied,” Palizza said. “I just
don’t get it. Twitter because I’m incapable of saying anything in 140 characters or
less and Facebook because why would you want to put all that information out there
in the public domain?” (Palizza, 2009).
Both Kurth and Palizza received a barrage of comments following their
articles, indicating the intensity of interest on both sides of this topic among
investor relations practitioners.
INVESTOR RELATIONS AND SOCIAL MEDIA 9
Legal and Regulatory Concerns
While some investor relations officers say they are holding off on
implementing social media programs because they simply do not yet see the value
of social media, the primary reason cited for investor relations’ slow adoption of
social media is concern about legal and regulatory issues. Investor relations officers
in the United States work in a maze of regulations, primarily from the U.S. Securities
and Exchange Commission but also from state regulators and the stock exchanges –
including the New York Stock Exchange and Nasdaq. These regulations are
designed to protect shareholders and to create a more level playing field in terms of
disclosure of information between professional and retail shareholders. A mistake,
such as disclosing non-public, material information in a manner not deemed
appropriate by the SEC, can explode into a major public relations scandal for a
company and lead to shareholder lawsuits, fines and even criminal charges.
“IR is trapped in a box of regulations and legal liability,” Palizza said in a blog
post. “Moving outside the box requires more time, effort and political capital than
it’s worth” (Palizza, 2008). By nature, blogs are supposed to be “quick, spontaneous
and resonate with the voice of the writer, “ Palizza said, all of which is difficult to do
in a traditional investor relations environment that emphasizes extensive internal
review and tight control over every document that is released.
Brian Solis, principal of FutureWorks, a public relations and new media
agency and an advocate for using social media in investor relations, also pointed out
the inherent pitfalls.
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“One wrong, irresponsible or casual post, comment, tweet (or) status update
can produce a domino effect of consequences that have yet to establish precedence,”
Solis wrote in a recent blog post. “While a tweet, for example, may seem harmless,
the activity and response sparked by an update could result in repercussions that
trigger SEC and shareholder retaliation” (Solis, 2009).
The SEC has both encouraged public companies in their use of social media
and continued to issue warnings about the possible risks. In August 2008, the SEC
issued an update titled “Commission Guidance on the Use of Company Web sites.”
The report praised the role of online communications in “modernizing the
disclosure system” and “promoting transparency, liquidity and efficiency in our
trading markets.” It praised the Internet for allowing companies to make
information available to investors “quickly and in a cost-effective manner” (SEC,
The SEC report pointed out that the commission was an early promoter of
disseminating corporate and financial results electronically when it implemented its
Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system, first
introduced in the early 1980s. Today, all public companies in the U.S. must file their
proxy statement, 10-K, 10-Q, 8-K and other SEC forms electronically on EDGAR
where they are available for public viewing (SEC, 2008).
In the same 2008 update, the SEC seemed to give a nod to social media by
stating “We believe that company disclosure should be more readily available to
investors in a variety of locations and formats to facilitate investor access to that
INVESTOR RELATIONS AND SOCIAL MEDIA 11
information” (SEC, 2008). The SEC also encouraged companies to use “push”
technology such as RSS feeds to distribute news releases and other disclosures
electronically and spoke glowingly about the potential for corporate blogs. “The
open format of blogs makes them an attractive forum for ongoing communications
between and among companies and their clients, customers, suppliers, shareholders
and other stakeholders” (SEC, 2008).
At the same time, the 2008 SEC report continued to sound warnings that are
sufficient to chill the enthusiasm for social media in many corporate suites. It
cautioned that the antifraud provisions of federal securities laws apply to blogs and
to electronic shareholder forums in the same way they do to traditional forms of
“While blogs or forums can be informal and conversational in nature,
statements made there by the company (or by a person acting on behalf of the
company) will not be treated differently from other company statements when it
comes to the antifraud provisions of the federal securities laws” (SEC, 2008).
While the SEC may not have given the definitive green light to social media
that some investor relations officers and securities attorneys would have preferred,
others believe the SEC is showing tolerance, understanding that corporations are in
a time of transition, trying to figure out the best ways to use the newer forms of
online communication for the benefit of both corporations and their shareholders.
“The SEC is not looking at social media as a new way to get companies,” said
Serena Ehrlich, a social programs officer with the StartUp Army, in a recent webinar
INVESTOR RELATIONS AND SOCIAL MEDIA 12
sponsored by Q4 Web Systems. “They just want to make sure that Reg. FD (the
SEC’s Regulation Fair Disclosure) is being followed.” Ehrlich is a long-time NIRI
board member who is active on Twitter and other social media platforms. She
noted that the SEC has not filed a single complaint against any company stemming
from its social media programs, despite a wide range of experimentation that is
going on among the first wave of companies that are using social media for investor
relations purposes (Ehrlich, 2009).
There is broad consensus within the investor relations field that social media
is a supplement to existing disclosures and won’t replace news releases, SEC filings
or conference calls in the near future, if ever.
“You should do social media on top of what you are already doing, not as a
replacement,” said Carol Stubblefield, a securities and corporate law specialist with
the law firm of Baker and McKenzie, in a recent webinar hosted by Business Wire.
“Social media is not yet widely enough disseminated to be a primary or sole
distribution” (Stubblefield, 2009).
Stubblefield also emphasized the importance of establishing social media
disclosure policies and informing employees about the company’s policy toward
their use of Twitter, blogs and other channels for discussing company business.
Social Media Pioneers
Despite the ambiguity of the legal and regulatory issues, a small-but-growing
number of companies are venturing into the water and learning to integrate social
INVESTOR RELATIONS AND SOCIAL MEDIA 13
media tools successfully with more traditional investor relations approaches.
Within this group, Twitter has emerged as the early favorite among social media
tools for investor relations, thanks to its simplicity and the ability to link Twitter
messages back to news releases, conference call announcements and other
disclosure information on the company’s Web site.
A recent study by Q4 Web Systems identified 80 public companies with
Twitter accounts. More than half (55 percent) of these companies are using Twitter
for investor relations purposes. According to the Q4 study, these companies use
Twitter as follows:
68 percent provided a link to their earnings release only.
7 percent provided a link to their conference call notice only.
11 percent provided a link to their earnings release and notice of their
11 percent provided a link to their earnings release and quarterly investor
7 percent provided a link to their conference call notice, earnings release and
webcast (Q4 Web Systems, 2009).
A handful of public companies in North America go much further with their
use of Twitter for investor relations purposes. They include U.S.-based eBay and
Canada’s CGI Group. Both companies send a series of “live” tweets during their
INVESTOR RELATIONS AND SOCIAL MEDIA 14
quarterly conference calls with investors, following release of their earnings. In
effect, they have become internal reporters, “covering” the conference calls and
reporting the results to the world via Twitter, 140 characters at a time.
“It (Twitter) is a new way to reach more people and expand our audience,”
said Colin Brown, communications and investor relations specialist with CGI Group
Even though CGI is a Canadian company, it also trades on the New York Stock
Exchange, meaning it must comply with U.S. SEC regulations. In an interview for
this research paper, Brown said the company is not worried about its use of Twitter
because it only tweets information that is already in the public domain (Brown,
2009). Brown said the company would never send a news release first on Twitter
before it has been distributed using more conventional means. Even the tweets
during the conference calls, which may appear spontaneous, are typed out ahead of
time based on the wording from the conference call script, so Brown knows he is
only posting words on Twitter that his company executives are saying on the
At eBay, Richard Brewer-Hay, senior manager of corporate communications,
does not work for the investor relations department but he regularly sends
investor-focused content on Twitter and on the corporate blog, titled eBay Ink.
Perhaps more than anyone else, Brewer-Hay has successfully walked the tightrope
of complying with SEC and company regulations while still maintaining a degree of
irreverence, personality and independence as the social media voice of eBay.
INVESTOR RELATIONS AND SOCIAL MEDIA 15
When he first came to eBay two years ago, Brewer-Hay said he was
concerned about the reaction he might get from the investor relations and legal
“I was concerned I’d be shot down,” he said during a recent webinar. To the
contrary, Brewer-Hay said both departments have been cooperative. Together, they
have developed a set of rules to guide the company’s unprecedented exposure on
Twitter and the company’s blog. Prior to covering an investor relations conference
call or similar event on Twitter, for example, Brewer-Hay first sends a series of four
disclaimer tweets, which he worked out collaboratively with eBay’s legal and
investor relations teams. The disclaimer tweets are as follows:
Tweet one: “Important information about the nature of this session.
Forward-looking statements and non-GAAP financial measures. Click here.”
Tweet two: “This session will contain non-GAAP financial measures.”
Tweet three: “The presentation of this financial information is not intended
to be considered in isolation or as a substitute for GAAP financial measures.”
Tweet four: “A reconciliation of these measures to the nearest comparable
GAAP measures can be found by clicking on the following link.”
Brewer-Hay defends the use of Twitter to cover eBay’s investor conference
calls and other presentations.
INVESTOR RELATIONS AND SOCIAL MEDIA 16
“It expands the audience and adds to the transparency,” said Brewer-Hay in a
webinar. “Not everyone on Twitter is going to listen to a conference call” (Brewer-
The variety of uses for Twitter seem almost endless. A few public companies,
including Johnson & Johnson and EMC Corp., have used Twitter to report about
proceedings at their annual shareholders’ meetings, while eBay has used Twitter to
send reports about “analyst days,” which are invitation-only events hosted by
companies, usually at their headquarters, for securities analysts and institutional
investors. In all of these instances, the net effect of Twitter is to expand the reach of
traditional investor relations activities that would typically attract only a relatively
small audience, thereby enhancing corporate transparency.
Dell’s Investor Relations Blog
One of the most-watched social media developments in investor relations has
been the Dell Shares blog, launched in November 2007 by computer maker Dell, Inc.,
and believed to be the first corporate blog dedicated to investor relations. Nearly
two years later, Dell Shares still stands virtually alone. While several companies
place investor relations information on more general-purpose corporate blogs, no
one else has moved as boldly as Dell to create a blog focused exclusively on the
company’s investor relations disclosures.
“Our job is to communicate information so investors can make informed
decisions,” said Robert Williams, director of investor relations at Dell, in an
INVESTOR RELATIONS AND SOCIAL MEDIA 17
interview for this paper. “Anyway you can find to get information out ‘one to many’
more efficiently is a good thing” (Williams, 2009).
Williams described blogs as a “very efficient” channel for communicating
with investors. Contrary to the concerns some express about blogs, he said Dell has
found that their blog actually saves staff time by reducing the amount of time spent
on the phone explaining financial results and other corporate developments.
“When we saw how effective our colleagues (at Dell) were in communicating
with our customers and other constituents, we felt it was a natural extension (to use
a blog to communicate with investors),” Williams said. “It’s a great way to
democratize information” (Williams, 2009).
One of Dell’s more innovative uses of its Dell Shares blog is to post video
interviews (“Vlogs”) with key company executives. Each quarter, Dell records a
video conversation with its chief financial officer to announce and explain recently
disclosed earnings results. Other recent videos on Dell Shares include interviews
with the Dell executives in charge of sustainability and small-business ventures. Far
beyond merely posting news releases, Dell uses its blog to provide context that
helps investors and other stakeholders better understand the company, its strategic
direction and its financial performance.
Contrary to critics who say analysts and institutional investors do not
want or use social media tools as part of their work, Williams said Dell’s experience
is that institutional investors are the primary audience for Dell Shares (Williams,
INVESTOR RELATIONS AND SOCIAL MEDIA 18
Williams said he’s “surprised” that more large-capitalization companies have
not followed Dell’s lead and established investor relations blogs. In a recent
interview, Williams cited three possible reasons:
1. The small size of most investor relations departments. Unlike Dell, which has
seven members on its investor relations team, the average company has only
one or two employees dedicated to investor relations.
2. A lack of understanding about blogs. Williams said many corporate
executives worry that blogs will be difficult to manage and that they won’t be
able to answer users’ questions.
3. The fear of disclosure mistakes and shareholder lawsuits (Williams, 2009).
Williams conceded it would be difficult for a small (one or two person)
investor relations department to manage a blog along with all the other expected
tasks, but for larger companies, he listed in a recent webinar (Williams, 2009) five
things to consider before starting an investor relations blog:
1. The blog should not be used as a substitute for news releases, SEC filings and
the traditional means for communicating material information.
2. It must be credible by communicating factual and accurate information and
avoid expressing opinions on investor issues.
INVESTOR RELATIONS AND SOCIAL MEDIA 19
3. It should be strictly for investor communications and should not be used for
marketing the company’s products and services.
4. An IR blog can be an effective tool to counter misperceptions about the
company without responding to specific market rumors.
5. It’s important to view the blog not only as a means for distributing
information, but as a way of listening to what your investors are saying (Dell,
Social media integration
Pioneering public companies with social media are finding they can leverage
their time and investment by coordinating their efforts using multiple social media
tools together. Dell and eBay, for instance, both use Twitter to announce new
postings on their blogs. Dell posts its Vlogs, created initially for the Dell Shares blog,
on YouTube. This can significantly expand the audience and drive more traffic back
to the companies’ Web sites and blogs.
Another innovative leader in using social media for investor relations
purposes is Cisco Systems Inc. Like Dell, Cisco produces video interviews each
quarter featuring corporate executives talking about the recently announced
earnings results. Also like Dell, Cisco posts its investor relations Vlogs on YouTube
to expand its audience and tweets on Twitter when new videos are available. Unlike
Dell, however, the investor relations department does not manage Cisco’s corporate
INVESTOR RELATIONS AND SOCIAL MEDIA 20
blog, titled The Platform, and the content comes from a variety of corporate sources,
not just investor relations (Cisco, 2009).
Facebook, LinkedIn, Flickr and YouTube
Initially, far more companies are using Twitter for investor relations
purposes than are using other popular social media sites such as Facebook, LinkedIn
and YouTube. Facebook’s blog-like qualities and social networking power make it a
popular choice for many companies, but so far most of these companies’ Facebook
pages appear to be managed by corporate communications, public relations or
marketing departments, not by investor relations. However, that is not to say
Facebook and YouTube, especially, do not have their roles to play in disseminating
corporate investor relations news. Cisco’s Facebook page, for example, carries
much of the same content as its corporate blog, including the quarterly earnings
videos and other investor relations announcements. Many companies include links
from their corporate Web sites or blogs to accompanying information on Twitter,
Facebook, LinkedIn, Flickr and YouTube. The major loser in this race appears to be
MySpace, one of the largest U.S.-based social networking sites. During this research,
no public companies were identified that use MySpace for investor relations
Popular sites such as Twitter and Facebook may steal most of the limelight in
the discussion about corporate uses of social media, but another category of tools is
proving to be of significant value. These are document-sharing, or “content” sites
INVESTOR RELATIONS AND SOCIAL MEDIA 21
that allow investor relations officers to expand the distribution and improve the
display of existing types of corporate documents, such as news releases, PowerPoint
presentations and SEC filings.
One of the more popular document-sharing sites is Slideshare, which allows
companies (and individuals) to post PowerPoint presentations, PDFs and other
document formats on a public site where they can be viewed. Slideshare is growing
rapidly, with 17 million monthly visitors and 50 million monthly page views. Heaps,
of Q4 Web Systems, described Slideshare in a recent webinar as “the YouTube of
presentations” (Heaps, 2009). His company has been one of the first to incorporate
Slideshare into corporate investor relations Web sites, including Barrick Gold Corp.
Heaps’ analogy to YouTube is on the mark. Like YouTube, what makes
Slideshare powerful is that information can be easily shared. To use YouTube
terminology, Slideshare makes it possible for a company’s PowerPoint presentation
to “go viral” and be spread from investor to investor, either via e-mail, embedding
on a blog or Web site, or through a host of other sharing tools. While it is not likely
that any company’s next quarterly earnings presentation is going to get millions of
hits like some of the more popular videos on YouTube, Heaps said it is possible for a
company to double its normal presentation viewership using Slideshare.
Docstoc is similar to Slideshare, although its emphasis is not on PowerPoint
presentations. Companies are using Docstoc to place a variety of content online,
including news releases, which can then be shared by readers or embedded on their
Web sites and blogs.
INVESTOR RELATIONS AND SOCIAL MEDIA 22
Social media has the power to help investor relations officers fulfill one of the
key objectives of their trade, “to enable the most effective two-way communication
between a company, the financial community and other constituencies” (NIRI,
2009). Social media can provide an added dimension and depth to the
conversation, as perhaps seen best with eBay and Dell, while allowing investor
relations officers the opportunity to both talk and listen to their shareholders,
analysts and other constituents. Aside from the potential need for additional
staffing in smaller investor relations departments, the cost of using most social
media tools is nominal.
The voices speaking in favor of using social media as part of the investor
relations communications mix are growing.
“The benefits of communicating to investors with corporate social media and
interactive data are highly attractive,” said Steve Carr, managing director, Dresner
Corporate Services, in a recent article. “Corporate social media and interactive data
(are) definitely on the way, and to some extent (are) already here. The time to
prepare is now” (Carr, 2009).
Jeff Morgan, president and CEO of NIRI, recently urged all investor relations
to get familiar with social media skills, whether they currently plan to use them in
their work or not.
INVESTOR RELATIONS AND SOCIAL MEDIA 23
“We need to understand these communications vehicles,” Morgan said. “It’s
incumbent for any IR person to try blogging, Twitter and using social mediums to
bring the discussion back to the company. Become an expert in it” (Morgan, 2009).
Heaps, through his work at Q4 , his company blog and frequent speaking
events at NIRI functions, has emerged as a champion for using social media for
“Disseminating information through traditional channels and making
financial statements available in one format are no longer enough,” Heaps said in a
recent blog post. “The world is adopting social media in record numbers … Adding
social channels to distribute information … will increase your audience reach,
empower people to engage with your company and give them a better
understanding of your investment proposition.” (Heaps, 2009).
If many of the arguments now being used by critics against social media
sound familiar, then that is because they are some of the same arguments used in
the 1990s when corporate Web sites first began to be used for investor relations
purposes. At that time, some critics said investors and analysts were not interested
in accessing corporate information online. We now know that is not the case.
Others raised concerns about the impact of adding the responsibility for investor
relations Web sites onto the workloads of limited staffs. Still others preferred to
maintain the status quo and did not fully appreciate the potential for investor
relations Web sites as a communications tool. Today, just a decade later, it is hard
INVESTOR RELATIONS AND SOCIAL MEDIA 24
to imagine how any corporate investor relations department functioned without a
robust Web site.
Social media is here to stay. It marks a revolutionary change in how
organizations, both private and public, communicate internally and externally. No
company today can totally ignore social media. At the very least, it is necessary for
all companies to monitor comments about them and their industry online, including
in social media. Only by doing so can they be aware of misinformation or rumors
that may be spreading online and that could impact their stock performance.
A rapidly growing number of investor relations officers already understand
the potential of social media, and it may be only a matter of time before social media
tools become as mainstream as Web sites and conference calls in modern corporate
investor relations work. The SEC could encourage this development by providing
more definitive instructions to guide companies as they chart their way through
these new waters. Those instructions would help eliminate the most worrisome
objection to the use of social media at this time, the fear of regulatory and legal risk.
INVESTOR RELATIONS AND SOCIAL MEDIA 25
Barnes, N.G., & Mattson, E. (2009, April 22). Nonprofit organizations lead the way in
social media adoption according to Society for New Communications
Research Chair Dr. Nora Ganim Barnes and Eric Mattson of Financial
Insite, Society for New Communications Research. Retrieved from
Brewer-Hay, R. (2009, September 17). Monitoring social media for investor
relations, webinar sponsored by Q4 Web Systems. Retrieved from
Brown, C. (2009, August 20). Telephone interview.
Bulldog Reporter’s IR Alert (2009, September 17). Survey reveals investor relations
professionals slowly embrace social media, especially smaller companies
– and which IR blogs they read. Retrieved from
INVESTOR RELATIONS AND SOCIAL MEDIA 26
eBay.com (2009, March 6). New social media guidelines for reporting company
information. Retrieved from
Ehrlich, S. (2009, September 17). Monitoring social media for investor relations,
webinar sponsored by Q4 Web Systems. Retrieved from
Heaps, D. (2009, July 1). Q4 Web Systems introduces social media and XBRL to
investor relations Web sites. Bulldog Reporter’s IR Alert. Retrieved
Joyce, S. (2009, September 23). Institutional investors and analysts increasingly
using blogs and social networks for research. Message posted to the
Q4 Blog, http://www.q4blog.com/2009/09/23/institutional-
INVESTOR RELATIONS AND SOCIAL MEDIA 27
Kurth, B. (2009, September 23). Don’t believe the hype: Twitter doesn’t matter to
IROs, Bulldog Reporter’s IR Alert. Retrieved from
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