Why should companies use social media to reach shareholders?

Social media offers companies many opportunities to reach their shareholders and broaden the realm of financial communications. However, with new rules and regulations enforced by the Security Exchange Commission (SEC), there has been some hesitation from public companies to include investors in their social media strategy and communication plan.

Public relations firm, MWW Group, offers insight into this topic of investor relations in “Social Media and Financial Communications.

This article gives advice and guidelines for companies who are trying to understand this notion of utilizing social media to reach shareholders, as well as how to do so while following SEC regulations. The firm also provides companies with insight into how social media will be beneficial to their financial communications strategy and strengthens relationships with their investors. With updates from sites like Twitter and Facebook, shareholders can gain frequent need to know information instantly from a company. Visual web sites like YouTube and Flickr allow investors to connect a face and a voice to the company they are interested in. This helps establish an image and identity for a company, creating a more personal relationship. Social media encourages two-way communication between a company and its audiences through comments and feedback. By reaching out to shareholders in this manner, the company creates another successful way to distribute information, thus strengthening financial communications and investor relations strategy.

To wrap up, in a 2009 panel discussion titled “The Evolution of Financial Communication,” Eileen Cassidy Rivera, VP of Communications and Investor Relations at Vangent Inc, argues that with the rapidly growing presence of people online, today’s investor relations officers (IROs) must find new and innovative ways to distribute information out to their relevant audiences. She concludes that social media allows IROs to reach audiences in a more creative manner, expanding away from traditional media into the modern developments of networking technology.

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6 responses to “Why should companies use social media to reach shareholders?

  • Laura Pond

    This is a well-written and professional post. I like how you started out with a very broad perspective and mentioning the SEC, then tied your ideas together with links from several sources. Through our readings and discussions throughout the class so far, we’ve learned that companies using social media to connect with shareholders can be highly beneficial. You mentioned several ways companies can use these tools to connect with the segmented audience.

    In later posts, will you mention how more well-known and less PR-tactical companies connect with their shareholders? I think that could offer another perspective to be covered in your future posts.

    • Hannah Getz

      Thanks Laura! Yes in my future posts I plan to further talk about the SEC restrictions as well as highlight several different companies and their approaches to using social media for financial communication.

  • Michelle Ackerman

    Hannah,

    I enjoyed reading your post about why companies should use social media to reach shareholders. I agree that social media can be a beneficial tool to companies. Like you said, social media can strengthen relationships with investors, as well as provide two-way communication and feedback. I believe that companies should embrace the social media tools that are out there today in order to improve their relationships with shareholders. I look forward to learning more about this topic in your future posts.

  • Chelsea Brooks

    I am interested in reading more about the benefits of using social media to reach out to shareholders. What kind of information would corporations be disseminating through social media?

    • Hannah Getz

      Companies more and more have begun to use sites like Twitter and blogs to communicate with shareholders relevant information such as financial reports and earnings. In my posts, I’ll be covering specific companies and how they have chosen to give information to shareholders online.

  • Sarah Bruton

    When I think of any career that deals with numbers I tend to zone out or back away. By using social media forms, I think they will be able to connect with audiences on a personal level and help others understand what all these numbers and graphs mean.

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