The ASX200 and the thin end of the Social Weiji
Most people are familiar with the famous proposition that the Chinese word for Crisis - Weiji - also can mean Opportunity. It turns out this is a fallacy. Nevertheless, such esteemed speakers as JFK, Richard Nixon, Condoleezza Rice and Al Gore have all used this mechanism at some stage to make a valid point: that your reaction to a challenge can be seen as an opportunity to grow. Recently, I've been working with a client listed on the ASX in developing a Social Media Strategy and it has led me to gain some insight into the sector's use of Social Media and how a huge opportunity is potentially going begging for some.
A recent report by Board Room Radio into the use of Social Media by the ASX200 discovered the surprising fact that still 1 in 5 of those organisations listed on the Australian Stock Exchange are ignoring Social Media. While a full 22 per cent are not using any form of Social Media, less than 50 per cent are using Facebook or Twitter (LinkedIn, not surprisingly, has however gained slightly more penetration at 58 per cent). Furthermore, 32 per cent have not increased their use of Social Media since 2012 and 31 per cent do not plan to in the future.
Of course it isn't unusual for a segment of any sector to be lagging in adoption of any new technology, least of all Social Media. However, in the area of Australian listed entities this direction seems particularly short-sighted in view of a recent change to the guidelines relating to "continuous disclosure". While interpretation of ASX Listing Rule Guidance Note 8 relating to the prevention of "false markets" is apparently fluid, the most obvious conclusion you must draw is that the responsibility for how an entity's stock is portrayed in the online information stream...belongs to the subject of that misinformation. As Caitlin (@niltiac) Fitzsimmons summarises in BRW:
"Listed companies are now legally obliged to monitor social media and disclose anything relevant to the market."
More specifically, the responsibility is that should anything incorrect or factually misleading appear on Social Media, the listed entity must alert the market, seek to correct that information and if necessary - in extreme cases - halt trading until the matter is rectified. This seemingly onerous duty is all in the name of preventing "false markets" - which is a "market where prices are manipulated and impacted by erroneous information, preventing the efficient negotiation of prices."
So the crisis for listed entities is that they must set up monitoring infrastructure to monitor Social Media as they now have a responsibility for managing misinformation in that space. Equally, they have additional responsibilities for employees - at once ensuring that they are not the source of such misinformation through their use of Social Media, as well as needing to enlist them into the monitoring effort (best done through a Social Media Policy).
However, the opportunity is to leverage off this compliance duty to attack the Social Media advantage with gusto - since the investment must be made anyway. Why not make this a strategy and not just a chore?
Opening up a sophisticated mechanism to monitor all Social Media relevant to your marketplace can be expensive but does provides the opportunity to seek value from that investment rather than merely meet a regulatory compliance:
- It provides insight into who is talking about you, how influential they are and - as a two-way medium - provides the opportunity to build relationship with them.
- It provides the opportunity to learn more about who your investor community are listening to, what they are talking about and gives you the intelligence you need to craft new content to inform that community
- It provides the wherewithal to monitor your competition more closely, efficiently and effectively giving you the heads-up on new products, new appointments or any context around any sudden stock movements
- It provides the opportunity to review how employees use Social media, potentially educate them on more responsible use of Social media and even mobilise the company in a Social Media marketing campaign
For more on this topic, Kinship Digital (with whom Artechulate partners on monitoring services) blogger Walter (@Adamson) wrote some very useful guidance when the new rules came into force in May 2013.
Artechulate can help companies listed on the ASX create strategies around turning this challenge into an opportunity with services that include Strategy Blueprint Development, Social Content planning and Social Media Policy drafting.