As we are in the midst of earnings, and as annual general meeting season is just around the corner, I thought I would share some thoughts on best practices for live-tweeting.  Note: these best practices have been put together based on observations we have made through our research on how public companies are using social media for investor relations.  Here is a list of what we will cover today (in no particular order):

1. Preparing tweets in advance of the call.
2. Providing a link to the materials associated with the live event.
3. Proactively soliciting questions in advance.
4. Consistent use of #hashtags.
5. Appending tweets with your ticker symbol.
6. Linking to disclaimers.

One additional note, before I get started. I’ve left disclaimers until the end, as I feel this warrants a post on its own.  So that said, I’ll be putting together some thoughts (with the hope of having some experts weigh in) on the appropriate placement of disclaimers on Twitter.  As usual, I’ll provide some examples.  You can look for this post the week of November 14, 2011.

1.    Preparing tweets in advance of the call. This is easily accomplished by extracting key messages from the release and the script. Compiling the information for the tweets prior to the call will ensure consistent messaging and help mitigate the risk of tweeting anything that was not previously released over an approved disclosure channel.  It would be wise to also share this information with your legal counsel in advance and obtain their sign-off.

2.    Providing a link to the materials associated with the live event. For example, providing a link to the event well in advance (common practice is at least one week prior), and letting investors know that you’ll be live-tweeting is a good best practice. Johnson and Johnson did this as shown in the tweet below:

Similarly, sending out a tweet the morning of the event and re-sending the link to the notice of call will serve as a reminder.

Also sending out a link to any additional materials relating to the specific event such as a press release or presentation as soon as it has been disclosed over the appropriate disclosure channels will equip followers with the information they need.  This can be especially useful in the case where a company holds an investor/analyst day to update the investment community on a merger.  For example, Constellation Energy sent out the tweet below to inform the financial media and bloggers with a link to a website that houses more information related to the merger:

3.    Proactively soliciting questions in advance.  If you are going to allow investors to submit questions in advance, you should have an appropriate system set up where investors can submit them.  For example, we have seen companies proactively ask their investors to post questions on their blog like Microvision does below:

We’ve also seen TVI Pacific provide a link to their website where the instructions are easily found in the upper right-hand corner:

In general, if you’re going to allow investors to submit questions in advance, ensure that they are properly informed. This can be easily accomplished by using your website and social media so everyone has an equal opportunity to have their question addressed.

4.    Consistent use of #hashtags.  If you’re going to live-tweet an event (and you intend on continuing the practice each quarter or annually for your shareholders’ meeting), we recommend that you use consistent #hashtags. For example, when Polycom live-tweets their earnings calls, they incorporate their stock symbol (PLCM) along with the current quarter (i.e. Q1, Q2…) and append every tweet with the appropriate #hashtag like they did below for their Q1 results:

Using consistent #hashtags helps followers identify the event being discussed. It also helps anyone who was not able to follow along the ‘live’ event, to search for and read the tweets at a later time.

5.    Appending tweets with ticker symbol. IR teams who are live-tweeting events – particularly earnings are also appending their tweets with their ticker symbol, like American Electric Power does below:

StockTwits invented the $TICKER which was built to aggregate messages around tickers.  As such it acts as a search engine that gathers all messages that include common messages using the $TICKER tag (e.g. $AAPL). Appending the $TICKER will not only ensure message discoverability across StockTwits, but also on Twitter and the wider social sphere.

6.    Linking to disclaimers.  As mentioned, stay tuned for an upcoming post dedicated to the use of disclaimers on Twitter.

Let me know if I’ve overlooked anything in the comments below.

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Here’s a list of interesting things we’ve been reading and sharing on Twitter this past week. Lots of great articles, we hope you find it interesting!

Social Media & IR Best Practice example “Dell Investor Relations Answers Questions from Social Media” http://t.co/EIPtZBj

FINRA proposes to exempt social media communications from getting prior approval: http://t.co/9OafC4K

Big Changes On Twitter – Everything You Need To Know: http://t.co/vh0Ifjs

New research on social media & IR, Euro focus “IR 2.0 International Benchmark Study”: http://t.co/taz1zoH

Twitter hedge fund beats the market, other funds: http://t.co/5OSpG1Q

Why Social Engagement Is Critical To Business Success: http://t.co/LUg8hPZ

Yes the wealthy are participating in social media: http://bit.ly/r5nVqX

SEC approves NYSE rule for complimentary investor relations services: http://t.co/PtmWBwL

Mind the Gap: http://t.co/Rvp4vxE

Governance Roadshows Prepare for Proxy Season: http://t.co/VdPKW5G

Does “under promise/over deliver” work in IR: http://t.co/yPM3gdA

Computers Rule Wall Street: http://t.co/MiM6QYW

Companies Begin Disclosing ‘Downgrade Risk’: http://t.co/jI6Dxng

Twitter users are more likely to impact your brand than any other social network http://t.co/RzM9VmU

HP To Apple: You Win. http://t.co/Pz9zCtu

Happy Reading!

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That’s why we’ve decided to put together a list of some interesting things we’ve been reading and subsequently sharing with our followers for the week of August 8, 2011:

Social Media: Get Out of My Sandbox!: bit.ly/pBgkad

Advisors begin addressing social media: http://bit.ly/pjYymM

10 Cool Social Media Monitoring Tools: http://twb.io/o6Bn1O

Social Media and Search Engine Optimization: Why They Work Together: http://bit.ly/nnke0O

At this rate, there won’t be a tablet market, just an iPad market: http://dlvr.it/fhYCb

How to make Social Media work for Earnings: http://bit.ly/n66EzR

What The Stock Market Usually Does After Big Political Votes: http://read.bi/nEN944

Why this crisis isn’t like ‘08: http://t.co/muOWNqI

About that plane over S&P: http://ir4.me/fX3x8

Groupon drops accounting measure used in SEC filing ahead of IPO: http://bit.ly/pzyYn2

How to use Twitter & StockTwits: http://bit.ly/qT7T7F

UK Govt. to meet Facebook, Twitter and RIM about their responsibility to not fuel riots: http://tnw.co/nu9XnX

Kingfisher takes social approach with new IR app: http://t.co/5gbmBIH

What Makes for a Successful Investor Relations Program?: http://bit.ly/ngIHsr

Happy Reading!

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That’s why we’ve decided to put together a list of some interesting things we’ve been reading and subsequently sharing with our followers for the week of July 18, 2011:

Is the SEC redefining Insider Trading: http://t.co/XMYHB2B

Google+, Investor Relations and Lawyers’ Panic Attacks: http://bit.ly/mOXqND

First Level 1 ADR company gets verified StockTwits Account: http://t.co/JgR0L4S

55% buy-side expect Twitter for Investor Comms to increase over next year: http://bit.ly/o6Yi2S

Why No One Should Believe Apple’s Earnings Guidance: http://t.co/BzymxAj

Trader pleads guilty to threatening financial regulators: http://nyti.ms/nPQMv6

Social Networking Policy: Write Now or Regret Later: twb.io/jQNBP5

CSA finds 55% of issuers reviewed deficient in corporate governance disclosure: http://post.ly/2TvPv

The next five social media trends and their impact on marketing: http://bit.ly/ohNa3l

Happy Reading!

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The following report includes 100+ examples of best practices and how innovative companies around the globe are using the web to communicate more effectively with analysts, shareholders and the financial media.

Download the FREE whitepaper today and you’ll learn how to:

• Improve your homepage to provide easier access to key information
• Present a more compelling investment proposition
• Organize information to improve accessibility & effectiveness
• Integrate tools to aid relationship & brand building
• Use social media to expand your reach and increase website traffic
• Integrate new interactive technologies that will increase user engagement and add value

If you’re involved in your company’s IR website, Click here to download the whitepaper and gain access to great examples of best practices from the world’s leading organizations and innovative small cap companies. Using these same techniques, you too can take your website to a new level in effective communications.

Check out this summary presentation for a taste of what is in the complete whitepaper:

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The CRA is in its 58th year and presents awards for excellence in financial reporting, corporate governance disclosure, electronic disclosure and sustainable development reporting to companies listed on the TSX and to federal Crown corporations.  Separate excellence and honourable mention awards are also presented to reports that are judged to be the best, regardless of industry sector, in each of these four judging areas.  Lastly, among the industry winners, one company is given the overall award of excellence for corporate reporting.

A lot of the companies were repeat winners from last year and Q4 would like to take this opportunity to extend our congratulations to all of them!

Awards of Excellence for Large and Small Federal Crown Corporations:

• Large Crown winner — Canada Mortgage and Housing Corporation
• Small Crown winner — Telefilm Canada

Awards of Excellence for Corporate Reporting: Industry winners:

• Communications & Media – TELUS Corporation (’08 winner)

• Consumer Products – Canadian Tire Corporation, Limited (’08 winner)
• Diversified Industries – SNC-Lavalin Group Inc. (’08 winner)
• Financial Services – TD Bank Financial Group
• Forest Products – Cascades Inc.
• Life Sciences/Technology – MDS Inc. (’08 winner)
• Mining – PotashCorp (’08 winner)
• Oil & Gas – Nexen Inc. (’08 winner)
• Real Estate/Utilities & Pipelines – TransAlta Corporation (’08 winner in Utilities & Pipelines)

These industry winners received the highest average rankings in the four judging categories: financial reporting, corporate governance disclosure and electronic disclosure and sustainable development reporting.

An Award of Excellence was selected in each of the four judging categories and an Honourable Mention was given for corporate governance disclosure, sustainable development reporting and electronic disclosure.

The judging category winners are:

FINANCIAL REPORTING:

• Award of Excellence – PotaschCorp.
• Honourable Mention – Bombardier Inc.

CORPORATE GOVERNANCE DISCLOSURE:

• Award of Excellence – Nexen Inc.
• Honourable Mention – TD Bank Financial Group

ELECTRONIC DISCLOSURE:

• Award of Excellence – PotashCorp.
• Honourable Mention – Talisman Energy Inc.

SUSTAINABLE DEVELOPMENT REPORTING:

• Award of Excellence – Suncor Energy Inc.
• Honourable Mention – Potash Corp.

The Overall Award of Excellence for Corporate Reporting was presented to the most outstanding industry winner in 2009 – PotashCorp.

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What follows is some of his advice to IR professionals for keeping pace in this rapidly changing regulatory environment.  He also discusses current challenges and opportunities and ways to address them. 

CHALLENGES & OPPORTUNITIES

Combating External Communications 

Regulation is evolving so rapidly it has become one of the key challenges for IROs right now.  All of these regulations clearly have an impact on how companies are currently conducting business and IROs should be good at:

1. Staying at the forefront of communications and keeping on top of what is being said externally about the company.
2.  Taking that information back to management and incorporating this into your strategy for dealing with shareholders.

Doing More With Less

The current economy has imposed budgetary constraints on companies which has made looking for ways to “do more with less” another key challenge.  Some ways to be more efficient and effective include Notice and Access tools and making improvements to your IR and corporate website.  The IR website is the dominant channel for investor communications and is one of the first places that investors, analysts and the financial media go to for company information.  So it is extremely important that is conveys your investment proposition and outlines your business strategy so potential, current and long-term shareholders have current and up-to-date information at a click of a mouse.

NIRI understands the importance of the website, as they will be launching a new version of theirs in mid-July.   They want members to use it as a first access point and are slowly revamping how information is laid out.  For example, they will group information they put out in categories or ways members will naturally go about seeking that information. The changes are expected soon.

Shareholder Communications

Another challenge facing IROs is how they communicate with shareholders.  Social networking can increase audience reach and allow companies to get to know their shareholders better through direct interaction – as traditional press releases, earnings calls and corporate presentations can be viewed, shared and disseminated on Twitter and discussed on blogs.

Jeffrey sees IR as the gatekeepers in social media and with companies slow to adopt these tools, feels IROs are well positioned to take the lead on implementing this into their communications strategy. “I think IR is in position to work with it. Whether we like it or not, this will happen around IR people. It will touch IR in a way where you can’t be sheltered. So you will have to deal with it—and it’s a good idea to start in a position of leadership, instead of waiting for it to happen to you.”

To summarize, in the coming year, there are three areas that he feels IROs will have to improve their professional skills:

1. Legal – as the leader in FD compliance, IROs must keep apprised of all of the regulation changes and stay on top of understanding what those changes mean. 
2. Social Media – IROs “must understand those communication vehicles. It’s incumbent for any IR person to try blogging, Twitter and using social mediums to bring the discussion back to company. Become an expert in it—that’s my advice now. That also relates to the regulatory and legal side. By understanding this, you can understand how to use it in compliance with Reg FD.
3. Financial Education – IROs need to become educated on alternative trading systems such as dark pools to help them understand who is trading their stock.

All of the aforementioned are ways in which IROs can increase their importance within the company.  For example, staying on top of all the regulatory changes can help elevate you to a key resource within the company.  Secondly, being proactive and communicating in social media forums will help you build better relationships with shareholders and increase your company’s profile.  It may also help you address contentious issues and address them head on in a timely manner before they escalate into a crisis.  Lastly, keeping apprised of alternative trading systems will help you understand  who your investors are and may even provide insights on the hedgers in these areas.

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Mike Willis, Partner, PricewaterhouseCoopers
Chairman, XBRL International

Panelist(s)/Co-Speaker(s):
Michael Becker, VP, Global Disclosure & Financial Reporting Services
Business Wire

This session was quite comprehensive, so I thought it would be useful to discuss the agenda that was put forth:

WHY IS THIS RELEVANT?
Public companies push out a lot of IR content such as earnings releases, quarterly reports and annual reports.  Once disseminated into the public domain, third party information intermediaries distill, transcribe and structure the company reported information into their proprietary taxonomies and sell that structured information to the analyst community.  This third party intermediary information is also available through sources such as Yahoo! Finance, Google and MSN Money.  From these publicly available sources IROs can directly observe the omissions, errors and other communication problems created by the third party intermediaries such as changing disclosure concepts and/or omitting key company specific unique disclosures.  This intermediary distortion in turn can lead to inquiries that don’t make any sense or worse, no inquiries at all – which means the investment community is solely relying upon the data transcribed and rendered by third party sources, thereby diminishing the company’s opportunity to correct any errors.

If you are skeptical of the degree of errors and omissions to your company reports please take a minute right now and go to the public sites and review the data available for your company and compare that information to your company reports.  “The data provided by intermediaries is incorrect as often as 30% of the time and incomplete 100% of the time“. The typical omission is the unique company specific disclosure, which is highly relevant to company IROs.

This is unfortunate, as preparing and finalizing material documents is typically a very time consuming and costly process, largely due to manual assembly and review processes that draws upon a lot of internal resources such as the finance, legal and IR department’s time to compile, review and publish – not to mention the costs associated with filing with the regulatory bodies and mailing out hard copies.

WHAT IS REQUIRED?
As some of you may know, in January 2009, the SEC introduced a phased mandate for filing in XBRL starting with the largest companies with a worldwide public float of greater than $5 billion – periods ending on or after June 15, 2009 and then extending to all sizes of companies over the next three years. The rules require companies to provide their financial statements on their corporate websites in an interactive data format using XBRL at the same time their financial statements are submitted to the SEC.

Content Requirements
In the first year of filing in XBRL format, issuers are required to tag each unique disclosure concept in the company primary tables (balance sheet, income statement, cash flows, changes in equity) and “block” tag (e.g. one tag per note) the financial statement footnotes and schedules.

In all subsequent years of XBRL formatted exhibits, issuers are required to tag the financial statement disclosures and also individually tag each significant accounting policy, table within a footnote and each quantitative amount within a footnote.  It is this second year requirement that significantly enhances the volume and accuracy of company disclosures available to the analyst community in a very cost effective, accurate and timely manner.

The XBRL Exhibit is required to be filed concurrently except for the initial report in each of the first two years which would be due no later than 30 days subsequently.

For purposes of the company SEC exhibit, the MD&A, executive compensation, or other financial, statistical or narrative disclosure outside the financial statements is not permitted to be tagged.

Corporate Website Posting Requirements
The XBRL filing is to be posted on a company’s corporate website by the end of the calendar day submitted or required to be submitted to the SEC.  The XBRL exhibit must remain on the website for at least one year; however, legal liability provisions are phased out over a two-year period with no “required” involvement by the auditor.

The US SEC rules will apply to public companies and foreign private issuers that prepare their financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP), and foreign private issuers that prepare their financial statements using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

WHAT IS IT?
XBRL is a freely available international information standardized format specifically designed for business information.  As such, it is specifically designed to provide supply chain standardization to address pervasive process problems.  XBRL is applicable to business information, related business rules, formulas and controls to not only to make financial information easier for investors to analyze, but also to assist in automating regulatory filings and business information processing.

As an Internet standard, XBRL can be used to create a common language for disparate proprietary software applications to more seamlessly communicate.  This is sort of similar to html but in a more granular manner and specifically for business information.

WHAT’S IN IT FOR THE ISSUER?
There are many implications of using XBRL to improve processes.  For example, issuers can implement using the bolt-on approach in which filings and reports are created following the existing process and converted to XBRL once finalized, either in-house or by a third party.  There is also the embedded option, which would enable companies to map their disclosures to the XBRL US GAAP Taxonomy directly within their report writer or consolidation application.  Pushing standardization further back into the business information supply chain provides structure for automation of downstream processes including the accurate rendering of XBRL-tagged SEC filings that can be accessed via your website with many interactive features.

Embedding XBRL in corporate reporting processes enables:

• Seamless exchange of information between software applications like your website and your analysts’ modeling applications,
• Automation of manual processes = lower costs, improved quality & timeliness like for your summary tables and graphs provided on your website,
• Enhanced transparency, access and control of information contained across a wide range of disparate internal data stores similar to the wide range of internal data stores that you are trying to access to address performance related inquiries,
• Improvements in data quality and access, and
• Better access to more relevant information for better decision-making, enhancing business intelligence and performance management information.

XBRL is more than a trend that IROs must be cognizant of – it will soon be mandatory for all U.S. based issuers and there is a voluntary program currently taking place in Canada to help the Canadian marketplace gain a greater understanding of this information standard.  Therefore it is essential that there is a full understanding how communication between the investor community and IROs evolve with the XBRL standard.  So stay tuned for additional blogs and presentations on XBRL.

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Twitter is a free social networking and micro-blogging service that allows its users to send and read other users’ updates (otherwise known as tweets ), which are text-based posts of up to 140 characters in length.

Updates are displayed on the user’s profile page and delivered to other users who have signed up to receive them. The sender can restrict delivery to those in his or her circle of friends (delivery to everyone being the default). Users can receive updates via the Twitter website, SMS, RSS, email or through an application such as Twhirl or Facebook.

Twitter was officially launched in October 2006 and by many accounts is now the fastest growing social network in the world with more than 400% growth over the last 12 months.  According to TwitDir there are now just over 3.2 million.  In all likelihood by the time I’m finished writing this post it’ll be around 3.3 million.

What makes Twitter so interesting is the accessibility of the platform. Unlike blogging, posting to Twitter is super easy as each post can only be 140 characters long.  Combined with its ability to instantly notify huge numbers of people, what is emerging is the new global shared notification system. Here are a couple examples from Wikipedia

• This year CNN began setting up Twitter pages for some of its anchors and reading tweets during broadcasts. Rick Sanchez prominently features updates from Twitter followers during his afternoon broadcast.
• Virtually all news services now broadcast updates via Twitter these including Reuters, CNN and NY Times
• 100s of Companies such as Cisco Systems, Jet Blue, and Whole Foods Market use Twitter to provide product or service information.  (here’s a list of a number of other companies)
• The Los Angeles Fire Department put the technology to use during the October 2007 California wildfires. ^[13]
• NASA used Twitter to break the news of the discovery of what appeared to be water ice on Mars by the Phoenix Mars Lander. ^{[14] [15]} Other NASA projects, such as Space Shuttle missions and the International Space Station, also provide updates via Twitter.
• News outlets such as the BBC have also started using Twitter to disseminate breaking news or provide information feeds for sporting events.
• Several 2008 U.S. presidential campaigns use Twitter as a publicity mechanism, including that of Democratic Party nominee Barack Obama. Check out election.twitter.com for a real-time feed of all election related updates.
• Activists used Twitter networks to co-ordinate street protest at the 2008 Republican Convention in Minneapolis/St. Paul. ^[20]
• 10 Downing Street, the website of the British Prime Minister, has started using Twitter.

As Twitter continues to grow it is important for anyone working in investor relations, public relations and corporate communications to join the network and experience how this service is truly changing the face of communications around the world.

One of our clients, Barrick Gold, just started using Twitter to broadcast earning releases and other updates and large companies like   Sun Microsystems,  Dell and GE are posting press releases and financial releases through Twitter.

There are tons of services available that connect to Twitter or allow you to search tweets or people. Here is a list to the Top 40 Twitter Tools out there.

Go sign-up at twitter.com if you haven’t already and start following the companies and people that you’re interested in. You’ll quickly see how useful it is.

Here are some Q4 Twiiter accounts you can follow to get started:

www.twitter.com/q4websystems

www.twitter.com/darrellheaps

www.twitter.com/chris_vickerson

www.twitter.com/jasonlittle

www.twitter.com/ccrofton   

www.twitter.com/jonezy

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The need for transparency is abundantly evident, but here are a few things that also come to mind for me:

Six degrees of separation – we all know this theory… through our network of contacts every one of us is within six ‘steps’ of each person on earth. Think of the magnitude of this for a minute and then ask yourself, shouldn’t there be a limit on how many ‘degrees of separation’ are permitted when packaging some of these financial products/partnering with other institutions?  How can risk be accurately assessed if the product cannot even be defined?

Creativity needs to be measured against business value – my son Ryan is an honours math grad from UofT who was nicknamed Physics Boy for his ability to always see how one thing was connected to another. One year for my birthday he presented me with a program he had written that included the mathematical probability for every potential move in the game of backgammon. He said to me, “Mom, if you learn this –  you will never lose.” I looked at him and thought, “But what would be the fun of playing?” When I hear about these complex investment products – I don’t necessarily see a room full of duplicitous finance types intent on deception through their creation of intricate models. Instead I see a room full of Physics Boys who joyfully create complex products without the foresight of practical application. Like every other creative ‘genius’ they need to be grounded through the oversight of guardians that test and measure the true long-term business value of their creations.

Short-term focus – we live in a world of immediacy and the market has come to expect more immediate gains. Quarter over quarter performance expectations can drive companies to deliver short-term results at the expense of the long-term health of the company.  Measuring short-term tactics against long-term strategy and assessing the risk involved is something investors expect of company officers. Should risk assessment factor more prominently into regulation/disclosure or if a company is truly transparent and communicative, will this be self evident?

Executive compensation not tied enough to the long-term – a few months ago I read about a staggering (but not uncommon) bonus paid to an executive in relation to a successful merger and I wondered… is it really worth that much if this same executive isn’t then able to extract the full value of the deal when transitioning the combined companies? Isn’t that the point at which success can truly be measured? Are companies paying out too much in advance of knowing the end score? Would tying compensation more closely to longer term results better protect investors?  (I’m sure the Physics Boys could come up with a model that would work for this.)

Like most of you, I have more questions than answers but what remains clear is that a healthy market relies on a high level of transparency between a company and its stakeholders. When this is compromised on a large scale, as it was with the credit swap fiasco, we are ultimately all at risk.

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