Working with Social Media and ASX Guidance Note 8

It is without question, social media has had an impact on listed companies. Impersonating investors (David Jones and EB Private Equity, McMahon Holdings), fake press releases (Whitehaven and ANZ) and hacking social media accounts (Associated Press and the White House) have all effected share price in recent times.
It’s interesting to note that all but one have actually been a direct result of social media. It has been the individual using the technologies at hand to create the desired impact and illusion, fooling company and the media. The real damage then occurs during the social media aftermath.

Attempts to clear the confusion

A recent AFR article offered more clarity on continuous disclosure. Kevin Lewis, group executive and chief compliance officer of the ASX suggested-

“… it was “only a half-truth” to suggest that companies now had to constantly monitor social media” –

the statement seems to have added more to the confusion. In an ASX video, Mr Lewis stresses that Guidance Note 8 is directed towards Directors and company secretaries. What they need to do is still unclear.

What Guidance Note 8 does do is create a need for companies to protect themselves if an issue arises. Process, governance, and monitoring should work accordingly to keep the company and the market under control for both traditional and social media. Where confusion is occurring is how to manage that process effectively. Governance and monitoring in these particular situations for the ASX200 vary from a typical governance process that deals with customer service and potential PR problems.

Monitoring

Real time social media monitoring is important for all the ASX200, whether it be keeping abreast of issues that may occur or tracking for hot spots to keep them under control by extending monitoring from typical day to day coverage to include market and company sensitive information. As circumstances change, new monitoring topics should be added or amended to keep tracking relevant and responsive to market trends.
Setting up the right monitoring to include market sensitive information is a good way to stay on the pulse and something all companies should be doing regardless of the ASX note. If issues arise, this is where Governance comes into effect.

Governance

Continuous disclosure and issues handling should be dealt with in a strong and prescriptive governance plan. Steps for continuous disclosure and responding frameworks should be implemented, with all staff informed of their own responsibilities in the process.
We’re currently seeing hoaxes as the method to cause issue in the local market, hacking social accounts, as well as creating rumours are other avenues for havoc. More often than not these are outside a company’s control and the way that the company deals with the issue is the only way to regain it. Response and action processes which comply with the ASX rules will ensure companies are protected from any potential misconduct should ASIC become involved.

What next?

Just as with any crisis management plan for traditional media management, the same process should occur for social media management. Encompassing the ASX regulations into these plans will help companies react better to market information, protect share price and guard against wrongdoing. Company directors and secretaries should be thinking wisely about incorporating the right monitoring systems, topics and search terms as well as managing the full range of potential events which can impact the market.