This week, the Securities and Exchange Commission (SEC) moved corporate disclosures into the year 2013, or at least 2010. In a release on Tuesday, the agency recognized that social media channels—including Facebook and Twitter—were acceptable methods of disclosure. The SEC included one caveat: investors must be made aware ahead of time that the company will utilize these channels for disclosure.
This move comes following scrutiny surrounding a tweet from Netflix CEO Reed Hastings in November 2012, which announced that subscribers had passed the achievement of one billion hours viewed. The SEC issued Netflix a Wells Notice, announcing the investigation of Hasting’s potential violation of Regulation FD, which requires companies to disseminate information in a way that does not favor one investor group over another.
The SEC’s decision to allow corporate use of social media to disseminate information is not completely unexpected. Since 2008, the agency has permitted the use of corporate home pages to disclose sensitive information—the subject of its release, “Guidance on the Use of Company Websites for Disclosure Purposes.” In fact, SEC representatives have encouraged delegates to NACD’s advisory councils to use corporate websites when providing additional details that go beyond what is required by public filings.
For directors, a group notoriously slow to adopt social media, the SEC’s decision could mark a significant shift in how companies disclose sensitive information, and investor relations generally. Starting with the 2009’s Proxy Disclosure Enhancements and reinforced by Dodd-Frank, the length of corporate filings has increased with the number of required disclosures. As a result, directors have been recommended to “tell their story,” going past boilerplate language to explain the rationale and strategy behind decisions.
First and foremost, it is critical that directors understand their company’s consumer and investor base. If these groups are active on Facebook and Twitter, the SEC’s decision to conditionally permit these as communication channels could provide a new method of engaging increasingly active stakeholder groups.
In the new era of digital media, just 140 characters on Twitter have the potential to affect a company’s reputation and severely impact its brand. In this communications minefield, it is essential that boards stay up-to-date on their companies’ social media strategies.
While directors should consider the defensive mechanisms in place, social media presents more than threats to cyber security and reputation. Websites such as Twitter, Facebook, and LinkedIn can create new opportunities for brand-building, instantaneous communication, and increased engagement with stakeholders.
Levick represents countries and companies in the highest-stakes global communications matters—from the Wall Street crisis and the Gulf oil spill to Guantanamo Bay and the Catholic Church. Levick was honored for the past three years on NACD Directorship’s list of the 100 most influential people in the boardroom and corporate governance community and has been named to multiple professional halls of fame for lifetime achievement.LEVICK’s digital team is a communications industry leader, deploying potent social media resources on behalf of clients worldwide.
Grafman monetizes content and investor capital for owners of intellectual property. As president of All Media Ventures, he advises investors, content owners, and media companies.
Grafman is chairman of Majesco Entertainment, a video game producer and distributor. He also serves on the board of directors at Big Tent (licensing), Pixfusion (technology), and is an operating partner at Mercury Capital Partners. He publishes frequently (Directors and Boards, NACD Directorship, Licensing Book, Inventors Digest) and contributes to MSNBC’s “Your Business.”
All of this experience has uniquely positioned Grafman to provide insight—from within multiple technology industries—into the importance of social media as a key component of any corporate strategy.
Fay Feeney, a self-described “digital whisperer,” is a trusted advisor to corporate boards and executives on the newest trends in business and social media. Feeney founded Risk for Good to advise board chairs, CEOs, the C-Suite, and the entire boardroom on how they can fast track their learnings in a digital world. In addition, Feeney provides strategic insights on how to connect to real time information, whether it’s found on LinkedIn, Twitter, YouTube, or Google. This is a competency that will strengthen directors’ “duty of care,” while improving their governance of these emerging strategic risks.
Feeney is a regular attendee at governance education events and is an NACD Governance Fellow. Her insights at conferences have always proven fruitful and her participation in this panel is sure to help directors develop their digital skills.
Braun has done it all: entrepreneur, corporate attorney, and television network president and CEO. He has been managed and mentored by some of the world’s best executives and, in turn, has had the opportunity to manage and mentor other talented people who have gone on to great success. He currently serves as the dean of the Lubin School of Business at Pace University.
Braun began his career in 1977 as a corporate attorney for the law firm Paul, Weiss, Rifkind, Wharton & Garrison and later joined a client of the firm, International Film Investors (an SBIC), where as senior vice president he structured and negotiated financing and distribution for feature films, including Gandhi, The Killing Fields, Hopscotch, Escape from New York, and The Howling. He has also served as president and COO of Imagine Films Entertainment as well as chairman and CEO of Viacom Entertainment. In this capacity, Braun was responsible for the turnaround of the production/distribution division for prime-time network programming. Continuing his career in the media, Braun served as president of the NBC Television Network and a GE corporate officer. Most recently, he has served as president and COO of Vanguard Animation LLC, which he founded with the producer of the Shrek animated feature franchise.
This is a small sampling of the long career that has uniquely suited Braun to comment on the issues challenging companies today, specifically in the realm of social networks.
Please join this distinguished panel at the “Social Media and Reputational Risk” session at the NACD Board Leadership Conference, and learn how to succeed as a director in the age of social media.
The conference will be held Oct. 14-16 at the Gaylord National Resort inNationalHarbor, M.D.—just minutes from downtown D.C.
Fay Feeney is CEO of Risk for Good, an advisory firm providing board chairs and corporate counsel guidance to monitor, govern and leverage the fast-moving landscape of social media, technology and the Internet.
One of my table mates at the NACD Director Professionalism course I recently attended in Deer Valley, UT was Allan C. Golston, president, United States Program of the Bill & Melinda Gates Foundation. It’s amazing who you sit next to at NACD events. Allan swore his learning wasn’t disrupted by my tweeting during class, and shared with me his takeaways from two days with NACD.
“The course was more than ‘rules of the road’; it was also a dialogue around how to think about the fundamentals of being an effective director in the 21st century in a strategic way. Whether it was rethinking what it really means to have an independent mindset, or rethinking what it means to have courage in the boardroom, or rethinking what it means to represent shareholders—I found these types of fundamentals the most useful.”
Allan Golston with Rob Galford, Compensation Chair, Forrester Research and NACD facilitator
I agree. I invested my time and money to have a refresher on fiduciary responsibilities and to pick up some useful tips on how to contribute most effectively in the boardroom and on key committees, but I came away with so much more: insights that have reshaped my thinking about how to lead in governance and examples of great board behaviors that will galvanize my own priorities and performance.
Mike Lorelli, CEO of Water-Jel Technologies, and another high-flying classmate, agreed. “As much learning in two days, as in two years of an MBA program,” he said.
Mike Lorelli at the NACD resource center
The sessions at Director Professionalism are led by active public company directors. I loved hearing Michele Hooper, who sits on the boards of Astra Zeneca, UnitedHealth Group, PPG Industries and Warner Music Group, encourage newbies by saying: “Everyone has a “first” board seat. Today’s most experienced directors had a first board seat.”
She encourages boards to consider qualified candidates without prior director experience, maintaining that, if your board is looking to expand their recruiting to engage more diverse thinking, they will need to refresh their thinking about board composition.
Although the NACD facilitators were great, the really valuable learning often came from other members of the class. “There really weren’t 10 instructors—more like 70 when you count the learning from the 60 peer-level CEO’s and directors,” said Mike Lorelli. Allan Golston agreed.
“The ‘official’ instructors were really strong, but the interplay and dialogue among the group enriched the content and learning well beyond what the official instructors provided.”
Pamela Packard is a private company director who is active in NACD’s New York chapter. She felt that the snowy setting of the Montage Deer Valley Resort provided lots of opportunities for “off the record” candid conversations among directors from diverse backgrounds and experiences. “These discussions complemented the formal sessions.” She also told me “newcomers to corporate governance had the chance to glean the subtleties of different board cultures and communication styles, learning from those of us with more experience.”
Pam really valued the plethora of publications and extra learning resources provided by NACD. “Great reference materials for future use!” she said.
Director Professionalism has a comprehensive list of learning objectives but really these were just the starting point for our class. In the fast moving world of governance, it’s not only what you know, but who in your network can help you keep your knowledge current. Thanks for a great class. I’ll keep on learning with NACD and look forward to becoming a 2011 NACD Governance Fellow.
To sign up for Director Professionalism in Houston TX, San Francisco CA, or Palm Beach FL, please click here