What’s worse than a CEO who doesn’t take social media seriously? A CEO who takes themselves too seriously, on social media. A recent high-profile example from a prominent hedge fund shows us why its crucial as an IRO that you take the time to educate your CEO on Social Media use when they’re at work and away from the office.
THE APEX EXAMPLE
The CIO of hedge fund firm Apex Capital wrote a scathing letter to the board of MicroStrategy, which addressed (among other things) the perceived personal excesses of the company’s CEO, Michael Saylor. Letters to shareholders from activist investors are nothing new, and activists have been significantly ahead of public companies in adapting new technologies to their purposes. Activist funds employ graphic design and digital content strategies regularly to win proxy disputes. This letter was yet another in a series of exchanges between activists and companies that shows that equity capital activists understand storytelling.
Michael Saylor was shown in front of MicroStrategy’s board to be out-of-touch with new communication technologies. Or least, the ways they should be used effectively as part of an online disclosure process. Flagrant social media posts are excellent ammunition for an activist who is trying to show shareholders that management is out of their depth. While the letter included many other points of disagreement, the photos of Saylor were the kicker. Did hearing about this prompt you to ask whether there’s a risk of something silly being done by your CEO on social media?
Is the situation dscribed above (your CEO tweeting pictures of his yacht in tropical locations during a period of perceived ‘shareholder neglect’) a nightmare? Completely. Could it have been avoided? Also yes. Take a closer look at the tweet & pic in question. It’s been posted from Washington DC, so really, it was an existing pic that could have been taken at any time.
And Saylor could have easily just added some context to the tweets: Maybe he was on legitimate vacation time. Maybe he was working the whole time he was away. (Bearing in mind that you can work from anywhere on the planet these days). Every CEO is entitled to have – and share – a personal life, and that’s what makes the 1-1 connection on a platform like twitter so different. Should Saylor have added some context? Yes. Was the timing poor? Yes. Bottom line for IROs: Use this example and educate your CEO on how scrutinized their every move is – and how easily a few words, or missing words, can be misconstrued. And ensure that anything they’re likely to publish is part of your broader digital investor relations strategy. If it’s not, it should be being pushed through social channels.
IMPACT FOR US
Do you know which social media profiles your CEO uses? If not, you need to rectify that situation as quickly as you can. While it might not seem like a core IR function, anything your CEO says online can potentially have huge ramifications for your organization. Are we saying you should take Twitter away from your management team and exclude them from the social engagement process? Not necessarily. But if they’re not taking their responsibility seriously and posing a regulatory risk, then absolutely, that’s your role.
WHAT CAN YOU DO TODAY?
Do an audit of your management’s social media profiles. Make sure they’re aware of the security implications of what they post. Though you probably don’t need to make any changes to your disclosure policy, it might be necessary to take control of your CEO’s Twitter and LinkedIn profiles on their behalf. There are a range of IR tools available that allow you to Tweet on behalf of your corporate account. Those same tools can give you publishing authority over anything that your CEO wants to post to their social media profiles. We suggest taking control in this manner so that they can still say what they want, but you’ll be able to QC anything that has disclosure implications.
Consider implementing an inbound investor relations platform that will allow you to see when an activist is hitting your website. 13-D information is obviously critical, but by that time, an activist could be all but assured of getting what they want. Better to be informed when they’re scoping your website so you have advance warning of activist activity and the opportunity to alert management before its too late.