In the last couple years, companies have started to recognize the great potential and opportunities social media can offer to reaching shareholders, investors, and financial analysts. In a 2008 decision, the Securities Exchange Commission (SEC) acknowledged social media, specifically corporate blogs, as a legitimate form of financial disclosure to a company’s constituents.
According to page 109 of SocialCorp: Social Media Goes Corporate by Joel Postman, the SEC decision to allow public companies to release financial information through social media outlets helps eliminate the time and money burdens of standard SEC financial reporting.
In a PR 2.0 post, Brian Solis discusses the SEC and its influence on how companies disseminate information to their stakeholders, particularly investor relations (IR) professionals. Solis points out the importance of remembering that despite the SEC recognizing social media as a valid source of disclosure, there still are limits and restrictions for sharing information. The SEC reiterates that companies still must follow current federal securities laws. Rather than jumping at the chance to reveal any or all financial information to stakeholders, IR has surprisingly remained on the sidelines, carefully waiting and observing potential opportunities and risks.
With regulations and principles from the SEC in mind, there are numerous corporations that have utilized social media for reaching shareholders and communicating financial information. I will highlight a few of these companies and use them as examples for how they chose to apply social media to IR development in upcoming posts.