Becoming the company hero: How IROs can use social media tools to save time and stabilize their stock price

During the last year, I’ve spoken to numerous investor relations officers (IROs) on the topic of social media and investor relations.  IROs tend to be the last holdouts within a company’s communication teams to embrace changes in the communications process.  Holding out is usually blamed on two reasonable excuses:

• Not enough time in the day to implement and run these changes
• Fear of the SEC due to the possibility of these changes leading to disclosure violations

I’m going to show you two ways IROs can become the company hero based on both of those challenges.

IROs have many, significant responsibilities relating to the health and welfare of the company.  They are often the voice of the company to key financial audiences, are responsible for communicating the company’s messaging to shareholders and stockholders, answer a wide range of shareholder’s questions and protect the company’s reputation.

Everywhere I go, I ask my audiences what is the single most repetitive, time consuming task they perform each day.  Each time I get the same response.  The most time consuming part of the IRO’s job is responding to the same questions about the company over and over, day after day.  And as you know, these calls are a big red flag that company websites are consistently not providing company information in a manner their core audience, shareholders and investors, can understand.

Let’s put some math to this.  If the average IRO handles six repetitive calls a day, taking approximately 10 minutes per call, then 1 hour a day, 5 hours a week or 260 hours a year is spent answering the same questions over and over again.  Want to save yourself 255 of those hours each year?  Update your FAQ’s or create a blog and use this as fodder.  And it’s easy to do.  Simply write out the questions you receive on a regular basis along with the answers you provide, post within your existing FAQs or blog and direct callers to the website.

So let’s do some more math:  What’s the estimated time to write out these repetitive questions and answers?  5 hours a year.  This time saved (255 hours) allows the IRO to focus on other aspects of their role.

Oh and another added benefit?  By updating your FAQs (or better yet, blogging) you are providing clearer, more consistent messaging to your core audiences which in can directly contribute to a more stable stock price.

IROs also experience huge headaches when it comes to stock price’s volatility. From trying to identify what might be causing stock to wobble, to determining a course of action, to trying to rebuild afterwards  this can take anywhere from 8 hours to weeks to repair.

Imagine if companies had a legal way to stop or slow this type of unsubstantiated stock movement within the boundaries of RegFD?  If the company had a blog, this would be a piece of cake.  All a company’s IRO would have to do is:

• The minute a company notice its stock price has started to wobble, IROs should go online and search sites like Google blog, socialmention.com or stocktwits.com – be sure to adjust your search time frame to last five days or less

• Review and determine the common theme/rumor affecting the stock price
• Write a short blog response post reiterating the company position on the rumor utilizing previously disclosed information
• Post this on the company blog ASAP, before the stock price begins to move
• Direct all callers to this post

Most shareholders will check a company’s website to see if a rumor is true or not before they buy/sell their stock.  By providing easy to find access to the information a shareholder needs to determine if a rumor is true or not, a company dramatically increases transparency and decreases stock volatility.

The best part?  Since companies are repurposing previously disclosed information and are communicating before the stock begins to slide, there is no need to distribute a press release.  It should be noted that once the stock has begun to slide or grow, any communications about the stock should be done via a press release to ensure one meets RegFD requirements.

One of my favorite examples of companies using their blog to help ward off stock affecting rumors is Cisco.  Once a rumor is indentified, Cisco uses their main company blog, with a link from the first page, to provide clear, succinct messaging to maintain a more stable stock price.

It is my hope that other IROs will take a second look at how their company website and even a company blog can be used to help IROS throughout their many daily tasks, clarifying reputation messaging, strengthening stock stability, better relationships with core audiences and even give a few hours a week back to the IRO.

Related posts:

• How does RegFD apply to Twitter and other social media channels?
• Lessons Learned: How to create social media content
• Social Media Don’ts
• Lessons Learned: Starting and growing your social media program
• Lessons Learned: Easy Tips on How to Create and Grow a Social Media Program