There’s a an extremely good report on IR Web Report, published yesterday, on why corporate boards should blog to improve their communication with shareholders.
Every corporate communicator, investor relations practitioner, and CFO should read this (as well as the companion article with ten excuses not to blog).
Written from the boardroom perspective, IR Web’s key theme is that blogging provides a credible platform for ongoing board-shareholder communication:
[…] “When properly executed, [blogging] provides boards and legitimate shareholders with a transparent platform to seriously engage one another on the issues. It can provide boards with a low-cost, highly effective means to establish a credible dialogue and allow directors to obtain feedback from a wider variety of shareholders with differing viewpoints.”
IR Web’s report is extremely interesting in a number of ways, some perhaps not immediately obvious.
The report cites research by The Conference Board published last week on boardroom frustration in the US and Europe that annual shareholder meetings are not effective forums for serious, informal discussion. IR Web says that The Conference Board’s key recommendations include using the web more in shareholder communications and annual meetings, and creating “a series of alternate forums where investors and corporate management can examine critical, long-term issues.”
In a very good analysis, IR Web highlights an astonishing lack of awareness in the US of the Sarbanes-Oxley Act on corporate governance and compliance (80% of US workers and 76% of employed investors have never heard of it), stating, “despite companies spending millions of dollars and hundreds of hours meeting new Sarbanes-Oxley requirements, there is very little awareness from the public at large. This can’t be helpful to business, especially if it wants to have its voice heard on public policy.”
IR Web’s timing with this report is highly apposite, helping propel the subject of blogging onto the investor relations agenda now.
Last week, I posted commentary on proposals by the US Securities and Exchange Commission for enabling greater use of the internet to facilitate the dissemination of information regarding initial public offerings of stock.
I quoted the Wall Street Journal saying that the SEC is proposing to formally allow internet broadcasts of marketing roadshows. The new SEC rules would tacitly encourage broad internet roadshow dissemination, giving companies that open them to the public a break from certain filing requirements.
What this bold development means going forward is the removal of much regulatory impediment to certain informal communication between a company and its investors and shareholders – which is precisely the manner in which IR Web’s report suggests blogs should be employed by the boardroom. And the report addresses the regulatory picture and the risks of selective disclosure of information, always a real concern.
The report includes a few examples of the types of topic a board director could start with in a blog as part of developing more dynamic relationships with shareholders:
- Board policies and procedures
- Board structure, size, and tenure changes
- Director nominations (suggesting qualified nominees)
- Director selection and evaluation (suggesting criteria for individuals and board)
- Shareowner proposals, including those addressing corporate governance issues and corporate responsibility issues
- Discussions on major corporate events, such as mergers and acquisitions, capital changes
Finally, IR Web highlights the greater credibility executive blogging has recently been given by some high profile companies, talking about the new GM Fastlane Blog as one example (see my post about GM’s new executive blog). If the Vice Chairman of GM can blog, directing his communication and relationship-development to customers, why not GM’s CFO with shareholders?
Anything is possible.
IR Web Report | Why Corporate Boards Should Blog
And now, the balance – IR Web’s ten excuses not to blog that I mentioned at the beginning of this post.
With this article, I really do congratulate IR Web on presenting ten highly-credible objections to corporate blogging and the measured responses to each of the ten questions. As IR Web says:
“If you’re really quiet, you might hear the wringing of hands of corporate secretaries and general counsel everywhere. The idea that boards might blog or use some similar web technology to communicate directly with shareholders may sound frightening, but it’s a development whose time has come. Here are some of the thoughts, debates, myths and issues boards might discuss in the hope they won’t need to blog.”
IR Web Report | 10 Excuses for Boards NOT to Blog
As I said at the beginning, these two reports should be required reading by every corporate communicator, investor relations practitioner, and CFO.
Don’t waste a single minute. Do it now.
Neville Hobson is the author of the popular NevilleHobson.com blog which focuses on business communication and technology.
Neville is currentlly the VP of New Marketing at Crayon. Visit Neville Hobson’s blog: NevilleHobson.com.
