Social Media & The Impact on Corporate Governance
In 2001, market regulators in Canada, Europe and the U.S. required public companies to simultaneously issue press releases to the Web and the newswire. In addition, any public meetings were to be broadcast to the Web via video feeds. All this before the rise of Social Media in a significant way. The bulletin boards (newsgroups) for discussion on public companies have been rampant for years, Stockhouse being among the pioneers.
My days running communications for a public company at the turn of the century saw us monitoring those newsgroups every day. Some days it was hard to not tap a condemning response to the idiocy of some of the comments and speculations made there. But other issues became apparent, among them was the damage that could happen when an employee spoke of something to a friend who then posted to the BullBoard on that company – this could wreak havoc on a stockprice; and nearly ended up in a line employee being fired once.
This was several years ago. It’s not about to get better. Public companies will face even greater challenges with Social Media in the years to come. Regulators may eventually require public companies to also post information to Social Networks, the same time they issue a press release. Video’s might have to be posted to several video networks and across mobile platforms as well.
Given how the content is both consumed, shared and managed across these channels, public companies are going to face complexities in shaping, distributing and monitoring those messages. What if the company must also issue notices across microblogging platforms like Twitter?
What will public relations and investor relations practitioners have to to consider if such issues arise? Increasingly, companies that thought they didn’t really have to concern themselves with the Web beyond marketing, will soon find out differently.
2010 will, I think, see some interesting changes to governance on communications issues for public companies.
In 2001 Market regulators may have not seen just how big the web was going to get. I can not see them forcing public companies to Tweet such information.
I think people still need to be careful as to whom they accept information from. Taking things with a grain of salt is key especially from some people. We all know the story of Steve Jobs and the incorrect hospital tweet which caused Apple’s stock price to decrease. Of course, there was little to no truth to the tweet.
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