Reaching Shareholders Online: Trends and Best
Practices in Online Communication and Social
Media in Corporate Investor Relations
Presented by David A. Hogan, APR
Instructor, Abilene Christian University
The 2009 Annual Conference of the International
Association of Online Communicators, Washington, D.C.,
October 1‐2, 2009

About the Presenter
Dave Hogan, APR, is experienced in corporate communications
and investor relations. He has served as an investor relations
officer for three U.S. public companies. Hogan currently splits
his time between teaching public relations in the Department
of Journalism and Mass Communication at Abilene Christian
University in Texas and working as director of investor relations
and corporate communications for First Financial Bankshares,
Inc. (Nasdaq: FFIN). Active in the National Investor Relations
Institute for more than a decade, Hogan is a member of the
Dallas/Fort Worth NIRI chapter and is a co‐founder and former
officer of the Greater Charlotte (N.C.) NIRI chapter. He is an
accredited (APR) member of the Public Relations Society of
America, treasurer of the Abilene Public Relations Organization
and active in the Texas Public Relations Association.
For more information, see Hogan’s profile on LinkedIn at
http://www.linkedin.com/in/dahogan76 or follow him on
Twitter @dahogan.

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 focuses on how online communication tools, and especially social
media, are changing the communication practices of corporate investor
relations departments at public companies of all sizes. It also examines 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 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).

The Role of Communications in Investor Relations
(continued)
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 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 definition, 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).

Investor Relations: Letting Others Take the Lead
(continued)
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 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).

Investor Relations: Letting Others Take the Lead
(continued)
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).

Investor Relations: Letting Others Take the Lead
(continued)
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 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).

Investor Relations: Letting Others Take the
Lead (continued)
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.

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 disclosure.”
“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).

Not Yet Convinced
(continued)
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.

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.

Legal and Regulatory Concerns
(continued)
“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.
“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).

Legal and Regulatory Concerns
(continued)
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, 2008).
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).

Legal and Regulatory Concerns
(continued)
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 corporate communication.
“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.

Legal and Regulatory Concerns
(continued)
“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 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.

Legal and Regulatory Concerns
(continued)
“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 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.

Social Media Pioneers
(continued)
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
conference call.
• 11 percent provided a link to their earnings release and quarterly
investor webcast only.
• 7 percent provided a link to their conference call notice, earnings release
and webcast (Q4 Web Systems, 2009).

Social Media Pioneers
(continued)
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 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 (Brown, 2009).

Social Media Pioneers
(continued)
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 conference
call.

Social Media Pioneers: CGI Group on Twitter

Social Media Pioneers
(continued)
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.
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 departments.
“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.

Social Media Pioneers
(continued)
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.”

Social Media Pioneers
(continued)
Brewer‐Hay defends the use of Twitter
to cover eBay’s investor conference calls
and other presentations.
“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‐Hay, 2009).

Social Media Pioneers: eBay’s blog

Social Media Pioneers
(continued)
eBay’s new corporate Web site, introduced in October 2009, incorporates
the look of a blog and offers many social media features.

Social Media Pioneers
(continued)
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.

Social Media Pioneers
(continued)
Dell’s IR 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
interview for this paper. “Anyway you can find to get information out ‘one
to many’ more efficiently is a good thing” (Williams, 2009).

Social Media Pioneers
(continued)
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).

Social Media Pioneers: Blogs and Video
(continued)
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.

Social Media Pioneers: Dell’s IR vlogs (videos) on Dell Shares

Social Media Pioneers
(continued)
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, 2009).
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:
• 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.
• 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.
• The fear of disclosure mistakes and shareholder lawsuits (Williams, 2009).

Social Media Pioneers
(continued)
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:
• The blog should not be used as a substitute for news releases, SEC filings
and the traditional means for communicating material information.
• It must be credible by communicating factual and accurate information and
avoid expressing opinions on investor issues.
• It should be strictly for investor communications and should not be used
for marketing the company’s products and services.
• An IR blog can be an effective tool to counter misperceptions about the
company without responding to specific market rumors.
• 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,
2009).

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.

Dell’s use of Twitter for Investor Relations
(continued)
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.

Social Media Integration: Cisco Systems
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 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 purposes.

IR Uses for Document‐Sharing Sites
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 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.

IR Uses for Document‐Sharing Sites: Slideshare
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.

IR Uses for Document‐Sharing Sites: Slideshare
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.

IR Uses for Document‐Sharing Sites: DocStoc
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.

IR and Social Media: Looking Ahead
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).

IR and Social Media: Looking Ahead
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.
“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).

IR and Social Media: Looking Ahead
Heaps, through his work at Q4 Web Systems,
his company blog and frequent speaking events
at NIRI meetings, has emerged as a champion for
using social media for investor relations.
“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).

IR and Social Media: Looking Ahead
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 to imagine how
any corporate investor relations department functioned without a robust
Web site.

IR and Social Media: Looking Ahead
(continued)
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.

IR and Social Media: Looking Ahead
(continued)
A 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. Hopefully the SEC will partner with NIRI, the stock exchanges and
other interested parties to develop practical guidelines for the use of social
media in corporate investor relations practice.
# # # # #

References
• 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,
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for‐investor‐relations/
• Brown, C. (2009, August 20). Telephone interview.
• Bulldog Reporter’s IR Alert (2009, September 17). Survey reveals investor
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References
• eBay.com (2009, March 6). New social media guidelines for reporting company
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• Ehrlich, S. (2009, September 17). Monitoring social media for investor relations,
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for‐investor‐relations/
• Heaps, D. (2009, July 1). Q4 Web Systems introduces social media and XBRL to
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• Joyce, S. (2009, September 23). Institutional investors and analysts increasingly
using blogs and social networks for research. Message posted to the Q4 Blog,
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References
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References
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