Investors Say Activist Shareholders Have the Upper Hand Against Companies in
Effectively Leveraging Social Media to Gain Support
FTI Consulting Study Finds 80 Percent of Investors Identify Shareholder
Activism via Social Media as Disconcerting; However, Only 11 Percent Are
Confident Corporations Have a Strong Investor Relations Digital Engagement
WEST PALM BEACH, Fla., Nov. 6, 2013
WEST PALM BEACH, Fla., Nov. 6, 2013 /PRNewswire/ -- FTI Consulting, Inc.
(NYSE: FCN), the global business advisory firm dedicated to helping
organizations protect and enhance their enterprise value, today announced the
preliminary results of the firm's new Digital Engagement Study among
institutional investors on the use and impact of digital and social media, as
conducted by the firm's Strategic Communications segment. The preliminary
findings from the study underscore the proliferation of digital and social
engagement by investors, shareholder activists and financial media alike and
an ill-defined digital defense strategy among organizations' investor
relations (IR) and corporate communications entities.
As the financial community becomes increasingly reliant upon digital
communications channels, financial and corporate communications teams are
being challenged to engage a cross section of audiences on shared social media
platforms. Among financial audiences, IR departments commonly do not have an
active role in the company's daily social media management while corporate
communications functions, which typically oversee these social channels, are
being forced to make real-time decisions about financial matters typically
outside of their remit.
"It is clear to us that activist investors have staked out a new battleground
from which to attack corporate America," said Elizabeth Saunders, Senior
Managing Director and Americas Chairman of the Strategic Communications
segment at FTI Consulting. "Carl Icahn may have been the first mover, but our
study confirms that, going forward, we can expect more activists to exploit
this gap in corporate defenses. This is a wake-up call to companies that IR
and corporate communications teams can no longer operate as independent
silos-- particularly in the case of social media, through which information
and opinions are so rapidly generated."
The FTI Consulting study found that 80 percent of investors believe
shareholder activists will increasingly leverage social media to target
companies. However, only 11 percent are confident that companies are
adequately prepared to defend themselves on social media platforms.
Despite heightened digital engagement within the financial community, the
research highlights that investors still prefer content filtered through
third-party financial influencers (e.g., media, sell-side analysts). The study
also found that 40 percent of investors seek content from these influencers
via social media (vs. corporations directly) compared with only 14 percent of
investors that seek information directly from corporations on social media.
While investors continue to rely heavily on traditional disclosure vehicles
(e.g., press releases, U.S. Securities and Exchange Commission filings), the
research uncovers an emerging reliance on digital mediums (e.g., videos,
infographics) among investors. Although the traditional formats are deemed 18
percent more credible by investors, the rich media formats are considered 13
percent more insightful and 11 percent more motivating.
"The findings of this study emphasize that narrowcasting communications to the
financial community no longer is possible, given that stakeholders are seeking
information in increasingly varied ways," said Mitzi Emrich, Managing
Director, Digital and Social Engagement in the Strategic Communications
segment at FTI Consulting. "It is critical for companies to have a social
media presence; share information across a broad range of both traditional and
digital channels; and use emerging media to connect with stakeholders-- and
influencers-- in new and meaningful ways."
FTI Consulting will preview and discuss the full study at The Holmes Report's
Global PR Summit 2013 to be held in Miami on Tuesday, Nov. 12, 2013. The panel
entitled "The Convergence of Financial Communications and Digital" will
include additional research findings on media and corporate digital engagement
and feature insights from industry-leading communications executives.
For more information on the report, visit: www.fticonsulting.com/digitalstudy.
The Strategic Communications segment at FTI Consulting conducted an online
survey among institutional investors between Oct. 3 and Oct. 11, 2013. The
survey sample consisted of 201 global institutional investors (e.g., analysts,
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping
organizations protect and enhance enterprise value in an increasingly complex
legal, regulatory and economic environment. With more than 4,000 employees
located in 24 countries, FTI Consulting professionals work closely with
clients to anticipate, illuminate and overcome complex business challenges in
areas such as investigations, litigation, mergers and acquisitions, regulatory
issues, reputation management, strategic communications and restructuring. The
company generated $1.58 billion in revenues during fiscal year 2012. For more
information, visit www.fticonsulting.com and connect with us on Twitter
(@FTIConsulting), Facebook and LinkedIn.
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