On 23 April, the New York Stock Exchange dipped 120 points for two minutes, during which $20 billion worth of trading equity was exchanged. The reason: someone had hacked the Twitter account of Associated Press and posted, “Breaking: Two Explosions in the White House and Barack Obama Injured.” Trading recovered but, still, one single tweet caused huge panic.
This incident happened just barely two weeks after the US Security Exchange Commission announced that “companies can use social media outlets… to announce key information… as long as investors have been alerted about which social media will be used to disseminate (it)”. Although social media has been around for close to 10 years, we discover new challenges every day.
The Australian Stock Exchange (ASX) recently went one step further in compelling listed companies in Australia to identify and monitor investor blogs, chats and other social media sites that contain posts about their companies. While most companies may have already been doing this, it’s different in that they will now be punished for NOT monitoring their own social media presence. Companies are also now compelled to act immediately on misinformation published in social media and train their staff in social media practices and guidelines.
Social media companies went completely gaga over this move, salivating at the possibility of sending all listed companies marketing material helping them ‘to comply’, and hoping that the big marketing budgets would move from traditional to social media.
The move by the ASX is a step in the right direction. An increasingly high number of people use social media (recent research in Australia shows six out of seven journalists use social media for their work) and ignoring it would be wrong. Politicians, CEOs, investors are all tuned in. But there remains an awful lot of garbage in the social sphere.
Companies need to adjust to changing ways of communication. It requires internal training in social media, and so before companies get worried about compliance, they need to start with the basics. It is likely that our own JSE will follow a similar trend in the future. But the loopholes in the regulations have not yet been closed. Can a company really control all internal information being communicated? Who is at fault if something is missed? Can we really prepare for all eventualities?
We shouldn’t over complicate things. Any organisation not monitoring social media buzz does not really deserve a business licence. You don’t need a regulation for that. And anyone reacting to social media should use common sense. The White House has been bombed and only AP reports it? Unlikely. If investors are reacting without first verifying the facts, they should be punished by those whose funds they are investing or managing. If you base your investment decision on what TweetDeck is telling you, you shouldn’t be in that job. If your company’s reputation is so vulnerable that something on social media can bring it down, it clearly has problems.
Communication does not become better the more it is regulated. Leave it up to business owners to decide what channels to use. The market will tell them what works and what doesn’t. City Press deputy editor Adriaan Basson told a media freedom conference recently that journalists should get off Twitter and go into the field where the real stories are.
This not only applies to journalists, but to all of us. Let’s think, before we react.
This story was first published in the August 2013 issue of The Media magazine, the free download of which is here.
IMAGE: Wikimedia Creative Commons /Elbie Ancona
