The Yaxis Live by Rajesh Kumar

Almost all publicly listed and traded companies have a department that’s usually called investor relations or like. Their job is to ensure appropriate shareholder communication. Investor relations is a crafted art and normally speaking, companies are very careful about any form of communication between investors and management – casual conversations are a strict no, all that is to be spoken is prepared and rehearsed. The fright of of the investor relations team also hovers around what the management bosses would possibly  start to talk  on their blog – something that has a bearing on the stock, or seen to be having a bearing on the stock. Agencies such as Securities and Exchange Commission (US) and SEBI usually frown on communication that violate of the stated and unstated guidelines on shareholder communication. Enter the new SEC.

Via Ebay’s official blog, we learn that SEC in US has introduced new guidelines and recognized the social dimension of communication.

“The last time the SEC issued guidance in this area, the idea of ’social networks’ hadn’t yet been developed, and creating a social network where shareholders could meet and exchange views was barely imaginable,” said SEC Chairman Christopher Cox.” Ongoing developments in technology have increased both the markets’ and investors’ demand for more timely company disclosure on the Web, and in turn, raised new securities law issues for public companies to consider. The guidance issued today clarifies the rules of the road so investors can gain — quickly and in a cost-effective manner — the benefits of Internet disclosure of the latest information on the companies they own or are considering buying.”

Clearly this goes a mile. The issue here appears interactive nature of blog format which allowed for two way communication and content was not static. It also does away with the requirement of a communication to acquire a printer-friendly format, which means an investor communication could even be blogpost, a Tweet, or multimedia film, or a flash based slides. Awesome.In one stroke, SEC gave a big leg-up to faster communication. When will the rest of the world adopt this?

Read my favorite CEO Blog- Sun’s Jonathan Schwartz is an old time blogger Why, his General Counsel Mile Dillion blogs too. Mike should be relieved at the above developments.

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