The ICGN Conference in Paris last week included a session on the very interesting topic of new and social media, exploring what are some of the ramifications in the context of corporate governance.

Taking corporate governance in its widest sense – i.e. the relationship within and between the company, its current and potential shareholders and stakeholders, there’s a great diversity of strengths, weaknesses, threats and opportunities posed by the potential of social media.

In essence, the growth of social media has shown that information and ideas can be disseminated faster and more widely than ever before.  As a society, we’re still adjusting to that.  We still have within living memory examples of football fans buying the ‘evening edition’ to see the afternoon football scores. These days, it’s not unknown for an entire stadium to erupt into cheers as twitter, facebook and other types of media help disseminate the latest scores around the globe practically before the goalkeeper has retrieved the ball from the net behind him.

For corporate financial communications professionals, social media is just one more tool for quick dissemination that nevertheless must be used judiciously in the context of market regulations on information dissemination.

A threat is that greater speed of communication tempts haste, and social media does not discern what is good information and what is not. Lack of veracity across social media is certainly a threat to a well oiled corporate communications strategy.

Social media is also a potential threat to the balance of corporate relations with stakeholders. Twitter played a high profile role in upping the ante between BA and the Unions – whether its use was constructive remains a moot point.

For investors, sharing of information and ideas is also a double edged sword. Social media certainly facilitate the sharing of ideas – but, as any wine dealer will tell you, the French keep the best wine for themselves, don’t they? If it’s true that information is power, would investors really give it away? Some information might be more valuable when shared with others (preparation for a shareholder resolution, for example), but should you trust information that others share with the world? Does the cost of checking it out actually exceed the opportunity cost of never having known?

Another consideration comes from the growth in use of social media. Put very simply, the more people use it, the harder it becomes to be heard, thereby potentially reducing the impact – and visibility - of the communication.

Does this therefore ultimately boil down not to what you know, but who you know? Social media may change the dynamics of who it’s good to know, perhaps, but speed and breadth of communication is not the same as reliability of information – which is of course critical to incisive, effective, value-adding decisions.

What is for sure is that new and social media can be very powerful, but it’s still growing and evolving. Our weekly newsletter of 5 years ago seems a thing of the very distant past, yet the Manifest blog you’re now reading is supplemented by tweets and posts in between.

Development and use of new technology to improve the processing and dissemination of information is central to our mission at Manifest, both internally and towards our customers and the wider world – encapsulated in our corporate motto “best execution in corporate governance support services”. If the new media do indeed present fresh challenges to disseminating valuable insight to recipients who will value it most, then we are strategically well positioned to step up to them.