The ASX has recently reissued its Guidance Note 8 which has highlighted the importance of paying attention to the information circulating on social media websites. The Guidance Note, effective as of May, requires listed companies to monitor blogs, chat sites and other social media sites that are known to regularly contain posts about the organisation.
The update reflects the increased use of social media as a platform for deploying information and the need for organisations to develop strategies to incorporate social media into their corporate governance and risk management processes.
ASIC, in a speech delivered at an ASX forum gave their support for the update. Belinda Gibson, Deputy Chairman of ASIC considered the requirement good practice for entities, as part of their existing investor relations activity.
It was conceded that it would be impractical to monitor every social media outlet; however, companies were urged to monitor sites that are important to a material portion of their investing community.
The Guidance Note places emphasis on monitoring social media ahead of an announcement. However, as noted by ASIC there is also a danger faced using social media after the announcement. Once information has been disclosed to the ASX and posted, companies need to be careful to ensure they do not put more information on social media than what was given in the release. ASIC recommends that the safest option is to post a link to the release.