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SOURCE KCSA Strategic Communications
Results of Q3 Study Reveal Fortune 100 Companies Aren't Making the Grade Using Social Media in Their Investor Communications
NEW YORK, Dec. 11, 2013 /PRNewswire/ -- 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:
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:
The Q3 index concluded the following key findings:
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.
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.
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."
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.
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