How executives use social media to build trust with investors

AN EARLY study out of Singapore Management University sheds light on the role executives' social media posts play in informing investors.

Social media is a frequent source of information about companies for both investors and consumers. The majority of S&P 1500 companies maintain accounts on Twitter (along with other platforms). Over the past decade, these companies have collectively posted over 25 million times on Twitter. Their posts span many issues, from financial discussions about earnings and expenses, to discussions about business strategy and innovation, to consumer- oriented discussion on customer service, product advertising, outreach, and social responsibility.

However, it is not just companies that interact with investors and consumers on social media. Over the past decade, at least 600 chief executive officers (CEOs) and chief financial officers (CFOs) of S&P 1500 companies have had publicly visible Twitter accounts. These executives have discussed not just personal matters, but corporate matters as well. Discussion of corporate matters by executives can provide investors with additional insight into the workings of companies through the eyes of those in charge, either in the form of new insights that the company has not provided already, or by highlighting or verifying insights that the company has already made public.