On the heels of another media frenzy concerning Tesla Elon Musk's tweets, in Toppan Merrill's "Social media and the year ahead" (p.7), Hunton Andrews Kurth Partner Scott Kimpel, The Conference Board Governance Center Advisory Board Co-Chair Bill Ide, Cornell Law Professor Charles Whitehead, and Shearman & Sterling Partner Lona Nallengara weigh in on the growing use and impacts of social media on corporate disclosure practices.
Emphasizing the importance of disclosure controls & procedures on par with other forms of communications, Nallengara suggests companies ask these questions in advance of communicating information about the company - whether via social media or otherwise:
- Is the information material to our business?
- Are the appropriate individuals in the company aware of this communication?
- Have we said it anywhere else before?
- Does this communication trigger any specific disclosure requirements?
- Are there any reputational issues with the form, content or timing of this communication?
- Is the content of the communication true?
Also key: Given the near certainty that the CEO or other executives will be deemed to be representing the company, Nallengara advises personal social media posts by the CEO and other executives be subject to the same level and scope of scrutiny as other corporate communications.
See also our recent reports: "Tesla: SEC (Again) Signals Import of Disclosure Controls & Procedures," "Social Media Oversight: Here's How!," and "Social Media Policy Checklist"; Pensions & Investments: "Group of investors files lawsuit against Tesla over Elon Musk's tweets" and Courthouse News Service: "Tesla Shareholders Want Musk Cut Off From Twitter"; and additional information & resources on our Social Media page.
This post first appeared in the weekly Society Alert!