Social media can be a very effective channel for reaching a broad audience, but also a minefield for listed companies to navigate, so a good understanding is critical to ensure you stay on the right side of the regulators.
This was the topic at a recent Social Media and Disclosure Forum hosted by Citadel-MAGNUS in partnership with Bellanhouse Lawyers, and with guest presenters James Rowe, Manager of ASX Listings Compliance and Ben Secrett, ASX Principle Advisor.
The reach of social media is well understood – in November 2018 there were 4.7 million active Twitter users, 4.5 million active LinkedIn users and 15 million active Facebook users in Australia1.
However, with this power comes great responsibility, particularly for publicly listed entities.
The key message to come out of the Forum was that ASX Continuous Disclosure requirements were platform agnostic – if you can’t say it on the ASX then you can’t say it elsewhere. This message alone could save you considerable heartache and unwanted attention from the regulators.
Another main takeaway was a reminder that the company is ultimately responsible for the content produced and distributed on its behalf. A number of examples were given of paid consultants or ‘associates’ promoting news about a company. Because of their close connection to the company, some of the content being promoted was deemed in breach of continuous disclosure requirements, with the listed entity held responsible. On these occasions the ASX sought clarification directly from the entity, which had to be lodged on the official ASX market announcements platform.
It is now clear that not having a formal Social Media Policy is no longer an option for a listed company. The reputational risk of not having a policy is too large. The policy should contain a set of guidelines and be provided to all employees, as well as extending further to cover consultants and contractors.
“Continuous Disclosure requirements are platform agnostic. If you can’t say it on the ASX then you can’t say it elsewhere”
As well as a policy, companies should consider a Social Media Strategy so there is a clear understanding of what it is trying to achieve from social media, which platforms will be used and who is responsible for managing and posting. The strategy does not need to be exhaustive, and should be part of a broader Investor Relations and Corporate Communication program.