Social media is now highly regarded as a powerful promotion tool in a ASX-listed resource company’s arsenal. However, a law firm has warned delegates at the 2018 RIU Explorers Conference that regulators are watching the rise of social media with growing interest.
Speaking on the third day of the conference in Fremantle, Bellanhouse Legal energy and resources partner Michael Boyce said social media – including Facebook, Twitter, LinkedIn – had over the past 18 – 12 months witnessed a rise in use by companies, directors, management and even shareholders to make announcements and promote projects.
There has been an increase focus among companies and among the media in using social media,” he said.
“I think the reason for that is now recognised among the smaller cap companies that don’t get the press or analyst coverage. It is a powerful tool to be able to reach investors and is a really good way to market your projects and get some traction.”
However, Mr Boyce warned that the rise of social media has meant it will only be a matter of time before the likes of ASX and ASIC put official guidelines in place as to how companies and management use social media for promotional purposes.
“The regulators are catching up to the rise of social media,” he said.
“Although regulators haven’t put out official guidelines or policies, there has been a renewed focus from regulators but also media and the public in general.
“We know ASIC and ASX have teams dedicated to social media and we know there are instances of ASIC contacting directors in companies with “please explains”.
“It’s not too far in the future before eventually someone is going to get seriously looked at.”
While there is currently no specific regulation in relation to social media, the Corporations Act and Listing Rules still apply including continuous disclosure, misleading and deceptive conduct and insider information.
Mr Boyce added that companies should have a social media policy in place which provide guidelines.
“No doubt it’s a powerful tool if used in the right way but companies and directors need to be aware of what is social media and what’s not and the perils of mixing the two.
“When directors are having a Tweet, think about if this is going up on ASX platform would you be comfortable with it.”