The United States Securities and Exchange Commission (SEC) recognised, since 2013, that companies can use social media outlets like Twitter and Facebook to disseminate key information to investors, as long as investors are alerted about which social media will be used to do this.

However, the usefulness of social media as an investor relations tool goes far beyond merely providing another channel for sharing compulsory regulatory updates. The reality is that investors are already looking to social media to gather insights into companies, whether they choose to utilise it explicitly for investor relations purposes or not.

In the past, customer complaints may have been handled quietly, but thanks to social media they are now broadcasted to the world. If individuals want to know how consumers see a specific brand, its social media pages can provide the first clue.

Social media also allows investors to instantly share their views on companies with each other, as well as with the wider public. The debate on whether a company share price is overvalued is no longer taking place only through conversations between fund managers, or between brokers and their clients.

It is happening live on Twitter for everyone to see. The use of company websites to disseminate information to investors democratised investor relations, as it made annual reports and trading updates much more readily available to not only shareholders but to anyone interested in a company.

However, the use of websites still requires investors to actively seek out information on a specific company. Social media provides a new opportunity for companies to more actively engage with potential investors and to curate the flow of information to them.

This means that, ultimately, social media is not that different from the role that traditional media has always played in investor relations. In the past, investor relations professionals employed press releases, articles, and interviews to create an investment narrative for their clients through the traditional media.

However, this narrative was always filtered by what journalists and publications chose to cover or to include in the article. Investor relations creates a conversation between the company and the shareholder.

This comes with enormous responsibility. In the past, the credibility of our messages was implicit after passing through the scrutiny of journalists and editors. Social media gives investor relations professionals the power to share the information and tell the stories we choose.

Our clients will rely on us more than ever before to make sure the market not only hears but also believes their story.

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