In late April 2013, the SEC issued guidance on the use of social media for disclosure of company information to investors, prompted by an investigation of Netflix CEO Reed Hastings after he posted information about a business milestone on his Facebook account. While the SEC exonerated Hastings of any wrongdoing and cleared Netflix to share information on Facebook, the situation kindled an intense discussion regarding Regulation FD (fair disclosure) and what is considered ‘disclosure’ on social media platforms.

In the new guidance, the SEC gives public companies the ok to use social media sites, including Facebook and Twitter, for fair disclosure of material, non-public information to investors-provided the public, the market, the media and investors are explicitly informed in advance that social media will be used for this purpose. These audiences must also know what they need to do to view the information at the same time as other investors.

While most companies and their Investor Relations teams still don’t use social media as the primary medium to disclose material information, many IR teams now use corporate social media site posts to supplement traditional press releases and company IR website announcements.

If your company decides against this practice, be aware that well-intentioned executives and employees still might inadvertently share information they shouldn’t through business or personal Facebook, LinkedIn or Twitter accounts, for example. It’s wise to monitor and archive your company’s social media to know what’s being said, even if you don’t plan to use social media for public disclosure announcements any time soon. Establish social media policies and regularly remind employees what they can and can’t do on social media.

Key considerations:

• If you do use social media to disclose material, non-public information, a company social media policy is essential. Your executives and employees need to know exactly how and when they can use social media; which social media platforms and accounts they can use; and that the social media policy will be supervised. Unlike a corporate IR site (with content controlled by IR), social media lets any employee inadvertently publish material, non-public information, and accidental disclosure is an ongoing risk to monitor closely.
• Implement a good social media archiving solution. Your archiving solution should allow you to capture official records of your company’s social media posts, and search, supervise, review and produce those records in their original format for future reference. The solution must also be flexible enough to archive and monitor messages from approved accounts on several different social media platforms, and accommodate new platforms in the future. Your corporate IR website (including its images, videos, text and audio) should be archived as well, so you have a solid record of material published online that demonstrates your team met fair disclosure requirements there, too.
• Create an audit trail. Your IR team needs the ability to demonstrate the review of corporate social media posts, and confirm who evaluated and approved each post. A good archiving solution will track the life-cycle of each social media post, allowing you to see when it was created or deleted, reviewed or approved.

The ability to archive social media is more important than ever, because while the SEC now approves of social media as a means of disclosure, it still reserves the right to analyze a company’s social media disclosures based on the facts, circumstances, andspecific content of each disclosure. If the SEC audits your company and wants your social media records, what will you do if you can’t produce them?