During the first half of the Saints-Texans Monday Night Football game this week on ESPN, I noticed the down-and-distance marker on the bottom of the screen was a rather unpleasing shade of yellowish-green. Many others saw it as well, creating a quite humorous social-media backlash on Twitter directed at the ESPN graphics department.
But what is more amazing than ESPN thinking the yellowish-green graphic was a good idea in the first place, was the response by ESPN’s Sr. Director of Communications, Bill Hofheimer, who acknowledged the feedback on his Twitter and the actions by ESPN to change the graphic to black-and-white for the second half of the game.
C-level executives and members of the Board of Directors, that is how you run a communications department!
Social media has immensely changed the ability to enact effective shareholder communication by providing real-time feedback on the release of information. Investors no longer need to wait for the quarterly conference call to hear the CEO give an update on the business. The rules around corporate governance have changed. The SEC has stated that social media is okay for company announcements. Advisory firms like Institutional Shareholder Services (ISS) are still relevant to large institutional shareholders, but retail investors have wholly migrated to social media platforms and crowdsourced blogging websites to find and consume information on stocks.
Smart management teams regularly communicate and engage with shareholders. The release of information on social media provides the ability to have immediate feedback on the news.
Investors can share their opinions, state questions, and voice concerns directly to the company without having to wait for the annual stockholder meeting.
Astute companies can use this feedback to their advantage when crafting the release of future information. Constant shareholder communication not only provides investors with a clear point of contact to access information, but it also provides a tool for executive and board-level accountability and ongoing evaluation by shareholders. Informed shareholders are loyal shareholders.
Lack of news or uncertainty on the ability to obtain information is viewed as unfavorable by investors. In the stock market, uncertainty is a risk. Capital will always flow to the companies with the best risk-reward profile. One clear way to lower perceived risk is to be in constant communication with shareholders.
An effective communications plan can meet all these goals and better position a company in the eyes of existing and potential investors.
And this not just my opinion!