Using blogs for informal relationship-building with shareholders

There’s a an extremely good report on IR Web Report, published yesterday, on why corporate boards should blog to improve their communication with shareholders.

Every corporate communicator, investor relations practitioner, and CFO should read this (as well as the companion article with ten excuses not to blog).

Written from the boardroom perspective, IR Web’s key theme is that blogging provides a credible platform for ongoing board-shareholder communication:

[…] When properly executed, [blogging] provides boards and legitimate shareholders with a transparent platform to seriously engage one another on the issues. It can provide boards with a low-cost, highly effective means to establish a credible dialogue and allow directors to obtain feedback from a wider variety of shareholders with differing viewpoints.

IR Web’s report is extremely interesting in a number of ways, some perhaps not immediately obvious.

The report cites research by The Conference Board published last week on boardroom frustration in the US and Europe that annual shareholder meetings are not effective forums for serious, informal discussion. IR Web says that The Conference Board’s key recommendations include using the web more in shareholder communications and annual meetings, and creating "a series of alternate forums where investors and corporate management can examine critical, long-term issues."

In a very good analysis, IR Web highlights an astonishing lack of awareness in the US of the Sarbanes-Oxley Act on corporate governance and compliance (80% of US workers and 76% of employed investors have never heard of it), stating, "despite companies spending millions of dollars and hundreds of hours meeting new Sarbanes-Oxley requirements, there is very little awareness from the public at large. This can’t be helpful to business, especially if it wants to have its voice heard on public policy."

IR Web’s timing with this report is highly apposite, helping propel the subject of blogging onto the investor relations agenda now.

Last week, I posted commentary on proposals by the US Securities and Exchange Commission for enabling greater use of the internet to facilitate the dissemination of information regarding initial public offerings of stock.

I quoted the Wall Street Journal saying that the SEC is proposing to formally allow internet broadcasts of marketing roadshows. The new SEC rules would tacitly encourage broad internet roadshow dissemination, giving companies that open them to the public a break from certain filing requirements.

What this bold development means going forward is the removal of much regulatory impediment to certain informal communication between a company and its investors and shareholders – which is precisely the manner in which IR Web’s report suggests blogs should be employed by the boardroom. And the report addresses the regulatory picture and the risks of selective disclosure of information, always a real concern.

The report includes a few examples of the types of topic a board director could start with in a blog as part of developing more dynamic relationships with shareholders:

  • Board policies and procedures
  • Board structure, size, and tenure changes
  • Director nominations (suggesting qualified nominees)
  • Director selection and evaluation (suggesting criteria for individuals and board)
  • Shareowner proposals, including those addressing corporate governance issues and corporate responsibility issues
  • Discussions on major corporate events, such as mergers and acquisitions, capital changes

Finally, IR Web highlights the greater credibility executive blogging has recently been given by some high profile companies, talking about the new GM Fastlane Blog as one example (see my post about GM’s new executive blog). If the Vice Chairman of GM can blog, directing his communication and relationship-development to customers, why not GM’s CFO with shareholders?

Anything is possible.

IR Web Report | Why Corporate Boards Should Blog

And now, the balance – IR Web’s ten excuses not to blog that I mentioned at the beginning of this post.

With this article, I really do congratulate IR Web on presenting ten highly-credible objections to corporate blogging and the measured responses to each of the ten questions. As IR Web says:

If you’re really quiet, you might hear the wringing of hands of corporate secretaries and general counsel everywhere. The idea that boards might blog or use some similar web technology to communicate directly with shareholders may sound frightening, but it’s a development whose time has come. Here are some of the thoughts, debates, myths and issues boards might discuss in the hope they won’t need to blog.

IR Web Report | 10 Excuses for Boards NOT to Blog

As I said at the beginning, these two reports should be required reading by every corporate communicator, investor relations practitioner, and CFO.

Don’t waste a single minute. Do it now.

7 thoughts on “Using blogs for informal relationship-building with shareholders

  1. Mr. Hobosn, it was with great delight that I read your article titled “Improve Shareholder Relations Via Blog”. You might be surprised to know that my company, AGORA Investor Relations, does exactly this for over 20 micro-cap companies across North America – and growing at a very rapid pace.
    Shareholders are ecstatic due to the increased quality and quality of communications, while public companies embrace it due to its reach and cost-efficiencies.
    In the month of January, we have signed 5 new clients and are working late in the evenings preparing proposals from interested companies. Blogging for IR works and AGORA is living proof of it. To see multiple IR blogs in action right now, please visit our website at
    If you would like to speak further about their benefits, effectiveness and efficiences, please don’t hesitate to contact me.
    Yours truly,
    George Tsiolis, LL.B.
    AGORA Investor Relations

  2. You are doing a great service to the global internet community by explaining how blogs are a multi-purpose communication platform.
    I think of how Alexander Graham Bell allegedly said he thought telephones would be used only for sending news reports and classical music concerts to home users. The phone rings, you pick it up, listen to news updates or Schoenberg.
    Some still ponder, “what do I need a blog for?” Others wait and let the pioneering firms make all the mistakes and take all the (slight) risks.
    Why not jump in and make something happen?
    Blogs are what web sites were supposed to be: highly interactive, frequently updated, rich in relevant content, easy to navigate, simple to use, delivering information quickly.
    Now that many conventional web sites have frozen into static “online presences” and strayed from usability guidelines, blogs have invaded the web to do the job they were supposed to do.

  3. Thanks, Steven, I appreciate your comments.
    You’ve made some good points. And for anyone wondering about whether to start a blog for business purposes and what benefits it would bring, I’d recommend a terrific guide made available by ChangeThis that’s on free download only until Jan 25 – the Beginner’s Guide to Business Blogging by Debbie Weil. See my post the other day for details:

  4. George, thanks for that information. I also received your email.
    What I understand from looking at your website and the client example there is that you offer companies an outsourced IR service, if I may describe it like that. I don’t see a blog anywhere: what I see is a discussion forum.
    I’m not dissing that, by any means. Forums can be a highly-dynamic means of developing relationships with audiences, as your example client clearly demonstrates. But it’s a different type of communication channel.
    With a blog for boardroom-shareholder communication such as IR Web Report suggests, one big difference is that the blogger is in charge of originating content which is the focus point for developing conversations through visitors posting comments, unlike a typical forum where any forum member can originate the content.
    And, for the executive-level blogging scenario suggested here, that is far more likely to be sellable to the boardroom than the free-for-all (by comparison) approach of a discussion forum.
    Take a look at the GM Fastlane Blog to see a great example of such a senior executive blogging. Although not an IR blog, it’s a terrific example of how one of the most senior leaders in a company – not only a big Fortune 100 one like General Motors – can use a blog to reach out to a particular audience (customers, in this case) and develop a dynamic relationship that otherwise would not happen.
    The important point here, too is that the blog is written by the GM Vice Chairman (although some in the blogging community are convinced it’s actually ghosted by the PR people – I don’t subscribe to that view) who is talking directly and informally with customers via the blog. It’s not outsourced – that might not be good news for you!

  5. Use Case: Blogging to Improve Investor Relations

    Can blogs foster better communication between corporate boards and shareholders? One IR analyst thinks so.

  6. I’d love to see a list of what you feel are the best CEO or Professional blogs.
    As of Oct. 2004, according to Dave Sifry of TECHNORATI, there were 5,000 “corporate blogs”.
    What is the best term to use to describe a blog by a serious business or organizational entity, from a CEO to an avid hobbyist to a club president to an individual entrepreneur?

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