Investor Relations and Social Media – Putnam is Taking a First Step
There seems to be some growing awareness of social media as a tool for the Investor Relations (IR) community. Reg FD – the Fair Disclosure regulation issued by the SEC in 2000 – was meant to level the playing field for individual and institutional investors. Although well-intended, it does impose a more vigilant review of what a company says about itself. However, even with regulatory compliance adding an additional layer of “thinking before speaking” (or blogging, posting, tweeting) social media is a natural tool for IR departments. It allows companies to speak more directly to investors – not just through the cool medium of PR releases but through the hot medium of online conversations (to steal some Marshall McLuhan concepts).
In a July 8 article for Bulldog Reporter’s IR Alert, Jeffrey D. Morgan, CAE, President and CEO, National Investor Relations Institute – when asked “In what three areas will IROs [Investor Relations Organizations] have to improve their professional skills most urgently over the coming year?” – said the following:
“Social media, is the next [second] one. We need to understand those communications 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.”
Putnam has already gotten started with Twitter. You can go to http://twitter.com/putnamtoday and follow what Putnam’s IR department has to say or follow Putnam’s CEO directly at http://twitter.com/robertlreynolds. Putnam is obviously trying to use social media to rebuild its reputation with advisors and investors since its funds took a nosedive early in this century and Putnam managers were discovered improperly trading their own funds. Of all of the industries, financial services is in most need of rebuilding relationships and whatever extras steps are needed to work within regulations will be well worth the effort in terms of reestablishing lost trust.
