We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedChange Management

Can CFOs resist social media as the future of financial reporting?


Social media can help expand interest in shares and make the stock more liquid, say proponents

Article comments

"Is Facebook a model for financial reporting?" That question didn't come from an overpaid social media consultant or Facebook founder Mark Zuckerberg. No, they were spoken by the UK's former head of KPMG. John Griffiths-Jones was asking whether the social networking site would be the future platform for delivering financial news and disclosures.

Could it work? Could the future of stakeholder engagement be the use of social media in a way that millions already do to manage their social lives?

There was little by way of a definitive answer to Griffiths-Jones's question at the time. But experts agree that transparency is vital, and the future promises even greater disclosure so we can't yet rule out the power of social media in financial circles. So what about the channel by which creators of information reach the consumers of information?

This is not just a rhetorical question. Companies have always used print publications and face to face meetings and slowly graduated to websites. But the next step could well be something else - full engagement with social media. After all, it is the medium people are increasingly using to talk about companies.

Facebook boasts around 800 million users, while Twitter, the micro-blogging site, has around 500 million registered accounts with around 100 million active Twitter accounts. Corporates will dismiss the phenomenon at their peril.

Accountancy institutes CIMA in the UK and the AICPA in the US recognise business rests on the cusp of something new. A recent joint report by the institutes finds: "The boundaries between a company and the outside world are much more permeable - this can work to a company's advantage, for example where employees can be positive advocates for the company's values, but equally, it's much harder to tell your own story."

In the blizzard of information out there on the web getting your voice heard can be difficult. But if companies don't engage it becomes a one-sided game. So can companies and finance directors make use of social media?

Entrenched scepticism

In fact in many senses they already are. A simple Google search demonstrates that finance chiefs and CEOs are already embracing YouTube as a channel to deliver video presentations. They include Frank Calderoni at Cisco Systems, George Quinn of Swiss Re and Richard Solomans of InterContinental Hotels.

These video forays are short, direct and highly scripted presentations of revenues. Lasting up to three and a half minutes, they are designed to deliver the highlights in a strictly controlled manner.

Control seems to be a central issue for companies when it comes to using social media. Dominic Walters, digital director at communications advisers Black Sun, says tools like Twitter and Facebook can be used for directing people to results information elsewhere on the web like company websites, and making announcements, but he says there is little demand on the part of companies to use it as channel for discussing or adding further detail to their numbers.

"Companies have to be very careful about what they are releasing from an audit perspective ... A company has to be careful they are giving out the correct data."

He adds: "All communications channels have a role to play, but there's a danger that we use them for the sake of using them rather than taking a step back and asking, 'what is the value of this?'"

There is a deep seated wariness, Walters says, to using social media for live discussion because of the way public statements from listed companies are so closely regulated. Communications to the markets go through many levels of approval before seeing the light of day making engagement on Twitter or Facebook inherently risky.

Share:

Comments

Can CFOs resist social media as the future of financial reporting?
Change Management

How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale valuemore ..


European IPO markets reaches pre-recession levels

At least 15 IPOs with over €250m proceeds are planned before the end of the summer, PwC saysmore ..

BG Group relocates trading HQ to Singapore

Oil and gas company says it wants to get closer to “high growth” LNG marketsmore ..

Chicago Sun-Times first major US paper to accept bitcoins

Backed by Coinbase, the move is part of a digital-first strategymore ..

Will the new tax breaks help Britain’s VFX and film industries?

Alex Hope, MD of Double Negative, explains what the autumn statement really means for UK VFXmore ..

How to improve your annual report

Regulators recognise the value of storytellingmore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale value more ..

In Depth
What every company needs to do about big data?

What every company needs to do about big data?

In the first of a three part series, Pat Brans explores just how big 'big data' will get? more ..

Advertisement

* *