By, Chris Michaels, Sr. Account Manager, Fusion LA (@chrisamichaels)

Yes, you read the headline right. I said IR. No, not infrared, Investor Relations. It’s not often a topic that we talk about at a PR agency, especially since many of our clients are either angel or VC backed startups. However, as many of our clients have aspirations for IPO events, it’s good to start thinking about this now.

With social mediabecoming such an integral tool to major corporations’ communications strategies, it’s only natural that some individuals start to question whether publicly traded companies should participate as well. The SEC is as  Orwellian as you can get when it comes to full disclosure and holding companies liable for what they said. Thus, public companies and startups need to closely examine both the regulatory guidelines and rules for social media participation.

But, what guidelines? Since 2000, the SEC has posted two mandates for communication – both of which have done little to specify what you can and cannot say. The language is ambiguous at best (ironic since the SEC calls for clarity in disclosures) – but the sentiments are clear:

  • Be transparent
  • Be accountable

Social media is a different beast than traditional communications. It’s faster, more responsive and gives a direct and personal touch to your communications plan. It’s also less shielded from the “forward looking statement” disclaimers or the legalese of traditional disclosures. But while social media is a quick way to communicate to large groups of constituents, social media is also not a lot of things.

According to Serena Ehrlich, the past president of NIRI Los Angeles and Dallas-Fort Worth’s chapters, social media is not a non-responsive, or one-way, broadcast platform. It’s not just replying on message boards and it’s definitely not “sharing information that hasn’t been disclosed.” Most of all, it’s not cheap, easy, static, perfect, text only or online forever.

That begs the question, what are the practical rules for implementing a social media program?

Here are two thoughts.

1) Location, Location, Location

A friend of mine, James Lee, recently posted an article on Bulldog Reporter’s IR Alert, where he states, “Any effective social media IR strategy needs to go back to the basics of any good IR strategy, which includes boosting shareholder value, attracting capital, stabilizing pricing and preparing for any potential merger or acquisition.”

You can’t blindly approach social media without understanding who you’re talking to, what your goals are, and how to best reach them? Sure, Twitter sounds good, but what are you using it for?

In the case of Dell, their IR teams do a great job of helping to announce company news and build anticipation for upcoming products. The teams have selected a number of tools from the social media arsenal to bolster existing efforts in a way that maintains the integrity of the IR process. On their excellent blog, DellShares they announce their financials, market survey findings and even have good video sit-downs with top executives to discuss their thoughts on the industry. Also, as the investor meetings happen, they tweet the news as it’s announced to provide a real-time stream.

2) Listen; Don’t Speak

Social media tools are designed not as a podium, but as a discussion. As Serena points out, you can’t let your participation be one-dimensional. You first have to understand how your constituency wants to get the information, what’s relevant to post and how to continue a dialogue. Find out from your IR teams and analysts if there are regular questions that keep coming up. Maybe it’s worthwhile creating a social preemptive media response to your next investors’ call, to cut back on repetitive questions. By listening first, you know how better to craft your message, so when you do speak, you can do so consistently and wisely.

The other half of that is DON’T SPEAK. If you don’t have a corporate social media policy, you’re so 2009. You MUST have one in place, before you even start your strategy documents. Make sure everyone knows the impact of social media, who the authorized spokespeople are and what the repercussions can be for failure to comply. Sure it sounds scary, but so does the SEC knocking at your door, or theirs.

Social media doesn’t have to be a gigantic undertaking. It just has to be a smart one. Understand that it’ll take time to get it right. There will be a few mistakes along the way and imperfect constituent response. But the more you consistently work to improve the tools you use with the feedback you get, the more likely someone will use your company as an example, and not Dell.

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