KCSA Strategic Communications Launches Investor Relations Social Media Index
Results of Q3 Study Reveal Fortune 100 Companies Aren't Making the Grade Using Social Media in Their Investor Communications
NEW YORK - December 11, 2013 - When it comes to using social media to disclose material information, the world's largest public companies aren't making the grade, according to a new quarterly index launched by KCSA Strategic Communications, a public and investor relations consulting firm headquartered in New York City. Following the third quarter earnings season, which officially ended November 15, KCSA's index determined that of Fortune's top 100 companies, less than 10 percent earned a "C" or better in their use of social media with respect to investor communications.
In April of this year, the SEC issued a report stating that companies can use social media outlets such as Facebook and Twitter to disclose material information and remain in compliance with Regulation Fair Disclosure (Reg FD). In doing so, the SEC stated that companies using social media for disclosure purposes must alert investors of the channels they intend to use.
Jeff Corbin, CEO of KCSA, said, "Following the SEC report, KCSA began to study the behavior of Fortune's top 100 companies to understand how, if at all, they are taking advantage of social media to share material information with their investors. At the end of the Q3 earnings season, we formalized this study into an easy to understand report card. What we learned was that while many are using social media for non-IR purposes, very few are using it in their IR communications and those that are, are not abiding by best practices."
To monitor how the world's largest and most influential companies are integrating social media into their investor communications, KCSA's social media index looked at the following criteria:
- Did the Company file a policy with the SEC on how they intend to use social media in their IR communications?
- Does the Company have IR-specific social channels?
- Is the Company's use of social media consistent with its disclosed policy?
- Does the Company have a mobile investor relations strategy or app?
After the analysis, KCSA assigned a letter grade (A through F) based on the company's performance. The grades, which are to be interpreted in the same regard as a traditional academic letter grade system, were assigned as followed:
- Satisfied all criteria - A
- Satisfied three of the criteria - B
- Satisfied two of the criteria - C
- Satisfied only one of the criteria - D
- Did not satisfy any of the criteria - F
The Q3 index concluded the following key findings:
- Only General Electric (NYSE: GE) and Google (NASDAQ: GOOG), of the entire Fortune 100, stated in an SEC filing that they intend to use social media in their IR disclosures.
- No company received an "A" and only two of the Fortune 100 companies received a "B":
- GE filed with the SEC and in it stated they would share IR news via Facebook, Twitter and their corporate blog; GE has a Twitter account and blog dedicated to IR disclosure; GE does not have a mobile IR app.
- Google filed with the SEC and in it stated they would share news via a Google+ channel dedicated to investor relations; Google does not have a mobile IR app.
- In addition to GE and Google, six other companies in the Fortune 100 have social media channels dedicated to investor relations - these include Sysco Corporation (NYSE: SYY), Archer Daniels Midland (NYSE: ADM); Pfizer (NYSE: PFE); Dell (NASDAQ: DELL), Johnson Controls (NYSE: JCI) and FedEx (NYSE: FDX). In addition, Pfizer maintains a SlideShare account in which it posts its investor relations presentations.
In addition to the Fortune 100 companies, KCSA analyzed the leading publicly traded social media companies with respect to their use of social media in investor communications: Facebook, Twitter, and LinkedIn.
- Facebook and Twitter have dedicated channels only on their own platforms for investor relations.
- LinkedIn does not use its own network for investor relations. It does, however, have a Twitter account in which it posts material IR news.
Corbin continued, "Social media has fundamentally changed how people consume information. Therefore, public companies should embrace and develop an investor specific social media strategy with the same thought and deliberate execution that is used for more traditional means of investor communications."
KCSA advises that public companies take the following steps to ensure that all investors will be on notice as to how a company will disclose, where they can expect to obtain material information, and remain in compliance with Reg FD.
- Conduct a social media IR audit to determine whether or not a company's investors are engaged with social media.
- To the extent it is determined that investors are engaged in social media, formalize a social media IR policy and specify the channels a company intends to use for disclosure purposes.
- File this policy with the SEC (either with an 8-K or as part of a 10-K).
- Use ALL of the channels specified in the filing whenever making a material disclosure.
Corbin concluded, "The paradigm in investor relations communications is changing before our very eyes. Whether it be social media or mobile technology, there is a tremendous opportunity for the world's most influential companies to establish best practices and to set the standard for other companies to follow. To keep the IR community apprised of the progress being made, KCSA will continue to monitor the Fortune 100 and issue its social media index on a quarterly basis."
For more information on KCSA Strategic Communications or the IR Social Media Index, visit us at http://www.kcsa.com or contact Sharron Silvers, firstname.lastname@example.org.
Did the Company file a policy with the SEC on how they intend to use social media in their IR communications?
Does the Company have IR-specific social channels?
Is the Company's use of social media consistent with its disclosed policy?
Does the Company have a mobile investor relations strategy or app?
Satisfied all criteria = A
Satisfied three of the criteria = B
Satisfied two of the criteria = C
Satisfied only one of the criteria = D
Did not satisfy any of the criteria = F
About KCSA Strategic Communications
KCSA is a fully-integrated communications agency specializing in public relations, investor relations and marketing with expertise in financial and professional services, technology, healthcare, media, energy and public services companies. Since 1969, the firm has demonstrated strategic thinking and program execution that drives results for its clients in the ever-changing communications and digital landscape. The firm's clients are its best references. For more information, please visit www.kcsa.com.