Henri Eliot: Should company directors tweet?
TWITTER is an interactive information distribution method that can be very effective when used as an advertising medium. The number of businesses that regularly use Twitter to communicate to their target audience is growing daily at an exponential rate.
In the conservative world of company boardrooms, the notion of directors signing up to Twitter and having followers is contrary to their traditional role. On the other hand, is it important for board members to be somewhat active in social media in order to understand firsthand how it works?
Businesses are changing rapidly to take advantage of this new consumer-led transactional world and company directors need to have the right language in order to participate in discussions and decision-making at the board table. And they need the experience to back up what they say.
The concern many boards may have is that anything they say might be viewed as the opinion of management.
So even for company directors just tweeting that you're meeting with someone could be market-sensitive or could become material. Imagine the impact on potential mergers or acquisitions.
A poorly worded tweet can create an instant viral social media crisis and may even damage your reputation, i.e, when you make a mistake offline, a few will know but when you make a mistake in front of hundreds or thousands of your Twitter audience, most of them will know!
But what do directors need to tweet about?
Twitter was created by Jack Dorsey as a free micro-blogging website. It was launched in August 2006 and became incorporated in May 2007. Since then the number of people who have signed up to the site has grown to over 240 million monthly users.
For many critics, "inconsequential information" such as tweeting that you've just had a shower, called your girlfriend, or heated tomato soup in the microwave are all very good reasons not to sign up, to follow or to tweet.
Yet a small percentage of company directors and CEOs are signing on to Twitter, building a following and following others. Why?
Celebrities are the most successful members of Twitter like Lady Gaga and Ashton Kutcher. But Twitter isn't just for popular and successful musicians, singers and actors. Political leaders such as US President Barack Obama are on Twitter; religious leaders who tweet include the Dalai Lama. Some of the world's biggest brands use Twitter as a way to contact their customers directly.
Yet in the US, according to a CEO.com study only a third of the Fortune 500 companies CEOs are on Twitter. A staggering 68 per cent are not involved in social media at all.
According to the study, CEOs are most active on LinkedIn. " Some 27.9%, or 140 CEOs, have LinkedIn accounts. That's up from 25.9%, or 130, a year ago." In fact LinkedIn is more popular with CEOs and Directors than with the general public. According to a Pew study released earlier this week, " 20% of the U.S. population who is online, is on LinkedIn. Among the CEOs who have LinkedIn profiles, just 25 of them have more than 500 connections."
I spoke with the few chairmen and company directors in New Zealand who use social media. The majority of these do very little: they have a LinkedIn account which they check irregularly. At the other extreme are the company directors who use Facebook and LinkedIn several times a week if not daily and also use Twitter.
To tweet or not to tweet?
In the world of Twitter there are those who tweet and those who follow. By far the majority of people are followers, using the service to "listen in" to "conversations".
What to tweet about and how often is a matter of common sense for a company director. There is a logical balance to be achieved by participating in Twitter in order to learn and experience social media communication in today's world while still maintaining an appropriate level of good taste, relevance and confidentiality.
Tweeting from a board meeting is an obvious example of what a company director shouldn't and wouldn't do. In short, any piece of information that should remain confidential shouldn't be tweeted.
But Twitter could be used to comment on a company's new product or service, the appointment of a new CEO or to cheer on a cause that the company supports.
Given the rise of Twitter and the public's hunger for instantaneous news, Directors should strive to stay informed about social media and avoid becoming a dinosaur. If you are considering using twitter, you should focus on the quality of your posts in order to attract serious followers.
Henri Eliot is CEO of Board Dynamics