Why lying to investors is getting harder…

Posted on: December 20th, 2013 by Staffan Engstrom

There has been lots of commentary on how social media is changing everything in communications. I was with a FTSE Finance Director talking about this. Like most of its peers, this company had put out some good amounts of ‘positive spin’ on its activities in order to retain trust and credibility with investors. I asked him what investors would think about the employee perspectives on some of their recent announcements, and so we searched Twitter together to have a look, which was something that he had never done before.

His jaw dropped. There, for everyone in the world to see, was tweet after employee tweet on the true situation, undermining much of the corporate spin. The city analysts who advise investors are generally a decade or more younger than the people who run companies. In other words, social media is arriving with the analysts first.

So the advice for analysts is: When corporates make big announcements, just have a look at what the employees are saying on Twitter – it will take about two minutes. You may find some interesting perspectives.
And the advice for corporates is: Before you brief the spin doctors, assume that the analysts have a direct line to your employees. The fact is that they do.