Why is Social Media Important for Shareholders?

As a college student, and as I learn more about corporations and how they work, I wonder how corporations build strong relationships with their shareholders. Besides making sure the financial ends of the company is on point, how do companies build relationships with their shareholders? After doing some research, I have found that companies are starting to use social media when dealing with shareholder relationships. In fact, if shareholders are not using social media in their company, it could cause some severe problems in the future because social media is quickly becoming our future and our way of interacting.

Though some companies are starting to use social media when dealing with shareholders, many others choose to snub social media. Unfortunately, this is putting companies in some danger of hurting the company in the long run. This idea can be seen in the IR Web Report on how this hurts the company, and why this needs to change. I personally agree this needs to change, I feel investors and shareholders should want to build stronger relationships, and should want to move the company forward using social media to make sure they understand and are on-board with all aspects of the company.

One major problem with investors not jumping into the social media move is that people in the company besides shareholders are being brought in to use social media for the shareholders. To me, that would be the first flag that something is not right as a shareholder. Somebody should not be using social media to put sensitive information out on the Internet that I know about. This can cause so many problems and dangerous situations for the company. Luckily though, many companies are jumping on the bandwagon.

Companies that jumped into using social media early on, have really adapted to the idea of using social media with shareholders. The IR Web Report website shows that social media has helped companies with their shareholders. The companies that use these venues to send out and discuss information have found this to be a positive avenue. The usage of avenues provided by social media by the companies with shareholders has increased! To me, yes, there may be some risk to putting information online, but just know how far to go with the information you are putting out there. Some of the “avenues” as I stated above have been Twitter, Facebook company pages, and YouTube. There are other ways companies can use social media as well, especially with shareholders. Companies can do online media newsrooms, and one of the biggest things I think companies really need to start utilizing are blogs for shareholders. Blogs allow for shareholders to receive the most recent financial information from the company, as well as to respond the postings to have a voice. Companies are really starting to utilize these to build relationships with their shareholders. There needs to be a level of clarity and visibility for a company’s shareholders, and with the way technology is moving, it is time that every company jumps on this bandwagon!


About Allie Romeo

I am currently a senior at James Madison University. I will be completing my degree with a double major in Communication Studies, with a concentration in organizational communication, as well as, Media Arts and Design with a concentration in corporate communication.
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5 Responses to Why is Social Media Important for Shareholders?

  1. You’re right, Allie, investor relations is a huge issue for companies. I’m interested in reading more about your research on how social media is providing these opportunites for companies and what specific technologies are particularly effective. Even though there are some pretty big risks in letting people access so much information about your company, it clearly is necessary in creating a strong relationship.

  2. Allie-
    I certainly agree that a company’s transparency is more important today than ever before. I believe the extent to which consumers use social media to create transparency within their own lives leaves them to expect the same transparency from those whom they rely on for goods and services. Of course, corporations will want to understand this concept as it will affect their bottom line.

  3. I thought it was interesting how you said social media leaves a company vulnerable. I agree that this can happen, but I think companies should use some discretion when deciding what information to disclose. I don’t think that all information about a company is right for social media, and I think that revenue falls into that category. I agree that shareholders need to be addressed, but they are most likely getting the financial details elsewhere.

  4. Sarah Pryor says:

    This is a good overview of why social media is important to companies, but needs to be approached with caution. While companies enable their shareholders to see into the company, they also open up their company to criticism. When it comes to maintaining the bottom line, I think the way they handle their social media is more important than actually having it. If they can’t respond to negative feedback or a crisis within the company, they will ultimately lose credibility with their shareholders.

  5. Pingback: BP Using Social Media With Investor Relations? | Allie Romeo's Blog

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