How Companies use Social Media for Corporate Reporting

The use of websites for corporate business and financial reporting by large public companies is well established. What is less established but a significant part of such reporting is the use of social media.

A recent (but still unfinished) study of 100 public companies shows some interesting facts about the use of social media. For example, it shows that most of them reference some social media from the Investor Relations section of their site. They have links, for example, to Facebook, Twitter and others. These references act as a clue that the social media being referenced are being used for more than general corporate purposes, such a marketing and significant non-financial events.

Following through those links, shows that many of them do use those social media referenced for the disclosure of information that would be of interest to investors.

The study shows that the use of Facebook, Twitter and LinkedIn are evenly split among the companies and are the most used social media. The types of information used for these media are basically the same, and include items like earnings releases, dividend declarations, major acquisitions, and other major financial events.

The inclusion of earnings releases is particularly important, as such releases are known to be a major determinant of stock market price changes and by inference a signifiant element in investor decision-making.

Youtube follows next in frequency of use, and is a vehicle for such events as CEO and CFO presentations, annual meeting presentations and other noteworthy events.

Instagram and Google+ follow, each with about a third of the useage of the leaders, but may be growing, particularly Instagram.

The use of social media for financial and business reporting for investors is growing and is now a significant part of corporate reporting. No doubt its use will evolve, just as the use of websites has done.