IN A development that demonstrates the potential for the social web to bring companies and their shareholders closer, Canadian-based copper producer TVI Pacific Inc. (TSE:TVI) has recognized the discussion board on the company’s Facebook page as its “official Corporate Discussion Forum.”
The move to official status was announced in an April 22 news release providing details of the company’s annual meeting and updating investors on the construction of a zinc extraction system at the company’s Philippine mine. The release referred readers to the company’s Facebook discussion board for more information about the the Zinc circuit.
Since launching its Facebook page in November 2009, the discussion board feature, which is bundled by default with all Facebook pages, has developed into a key communication channel between TVI and its investors. The first posts on the forum were initiated by retail investors. As of April 22, almost 200 posts have been made across 33 separate discussions.
By officially adopting the Facebook discussion board, TVI is now drawing all investors’ attention to the fact that the forum is a formal part of the company’s communications program and that they may find useful information there. It was important to do this so that all investors were made aware of the board’s existence and have an opportunity to review the information the company is providing on it.
The move also demonstrates the company’s commitment to a method of communication that its retail investors have adopted and are comfortable with.
Quelling rumors, building relationships
TVI does not use the forum to disclose material non-public information. The information the company posts provides useful context and additional explanation. However, the information is obviously of high value to investors because they are consistently appreciative of it.
It’s worthwhile reviewing the discussion board yourself to see the nature of investors’ questions and the company’s posts.
TVI’s executive director of investor relations Rhonda Bennetto explained it this way in an email: “TVI decided to adopt Facebook as its ‘official’ corporate discussion forum for two reasons. First, it is an effective way to correct the facts. When we notice, on public chat rooms like Stockhouse Bullboards, incorrect information about TVI , we post a discussion topic and simply post the correct information. I know it works because I will see a post on the Bullboards a short time later quoting the correct information. This has been very effective in keeping the facts straight.
“The second reason is that it’s important for us to develop relationships with our shareholders and by using Facebook, we can identify with them without the ‘anonymous factor’. Shareholders who are personally or emotionally attached to a company tend to be more loyal and less likely to spook in a downturn.”
User profiles make participants more accountable
Access to view the discussion board is open to the public and all information on it is exposed to public search engines such as Google. However, only individuals with a Facebook profile are able to join the page and post comments and questions.
As the page owner, TVI can moderate participation by blocking people from joining its page and by deleting discussions or posts. The company has posted a simple Discussion Board Etiquette that states that the discussion board is “not an ‘opinion’ or ‘venting’ forum and any posts that lean in that direction, or hint at slander or defamation, will be removed and that account blocked from further participation.”
A major difference between Facebook and other forums, including Broadridge’s InvestorNetwork, is that most participants are identifiable. Facebook does not permit anonymous profiles, and even though privacy settings can mask much of a user’s information, it’s impossible to be completely anonymous if a user wants to post content to the forum. Non-registered users who have read-only access are completely anonymous to the company.
This makes participants more accountable for their actions and statements and, coupled with the moderation tools, leads to a higher standard of decorum compared to anonymous message boards.
Being able to view participants’ public profiles, including friends lists and their interests, gives participants a greater sense of community and understanding of who they are conversing with.
From a legal perspective, companies are not responsible for comments made by other participants. Of course, any posts by companies or on their behalf are subject to securities laws, so the same rules that apply to any other communications apply on a forum.
More user control over privacy than typical IR website
Although Facebook often draws criticism over privacy issues, the fact is that the social network gives investors greater control over their privacy than they have on companies’ investor relations websites.
Many companies use advanced tracking systems on their IR websites, a fact that is typically not disclosed to the investors and analysts who use the sites. By comparison, companies have limited access to information on the use of their Facebook pages. In the case of users who are not signed in to Facebook, no identifying information is available to page owners.
Ultimately, TVI is responding to something initiated by its retail investors. Institutional investors and analysts likely will find the forum of limited value.
But then they often have the luxury of having IROs, CFOs and CEOs on speed dial.
* Disclosure: I was consulted informally by Rhonda Bennetto prior to the company making this announcement. I advised her to make the forum an official part of the company’s communications program so that all investors were made aware that the company may use it to post relevant information and context.