Recent amendments to ASX Guidelines have introduced obligations
on 'C-Suite' executives, and other senior executives, to
monitor social media. This article provides a summary of the
changing obligations on companies in the social media space and how
these changes impact on C-Suites and other executives.
Emergence of Social Media and Compliance with Brand
When social media first began to consume the internet, it was
arguable that C-Suites and other executives had a choice regarding
whether or not to engage in, and monitor, their companies'
social media presence for the protection of their brand and
A recent Court decision in a case against the company Allergy
Pathways has held that a company's social media pages are
considered advertising. The decision is discussed further in a
recent article we posted, entitled "
Customer Testimonials Under Scrutiny"
The Court's decision has put companies on notice that they
must monitor their social media pages to ensure that they are
accurate and correct at all times. This specifically relates to
companies ensuring that customer testimonials, and posts by
customers or other companies placed on their social pages are not
misleading and deceptive.
New Obligations on C-Suites
On 1 May 2013, the ASX released the final Guidance Note 8 of the
Listing Rules, which puts C-Suites and other executives of listed
companies on notice that they must now have a social media
compliance strategy to comply with this Guidance Note.
Interestingly, in this Guidance Note the ASX has taken social
media compliance to a new level that is beyond marketing compliance
of social media and beyond the company's own social media
pages. The Guidance Note applies to social media that includes any
investor blogs, chat-sites or other social media that the company
is aware of that regularly posts comments about the company.
With respect to social media, the Guidance Note states that
companies must monitor social media sites and activities for:
any leaks in announcements;
any signs that indicate that information about a transaction
may no longer be confidential;
any comments that speculate on a particular matter involving a
listed entity (e.g. that is about to enter into a material
transaction or that is in material financial difficulties).
If any of these are identified by a company, it must notify ASX
immediately and it must take action in accordance with the Guidance
Note to ensure compliance with the ASX Listing Rules. Depending on
the nature of the statements made on social media, such action may
stopping any comments about speculations;
correcting any misleading and deceptive statements being made
about the company; and
discussing with ASX whether it is appropriate to request a
What does this mean?
The current saturation of social media on the internet means
that companies now need to determine to what extent they will
participate in social media, as it is no longer the case that it
can be ignored.
The effect of recent decisions and guidelines from various
regulatory bodies means that:
at a preliminary level, education is needed around social media
and its impact on the company at all levels including the board,
executive, management and employee;
social media sites not only need to be reviewed from a
marketing and sales perspective in protecting the company's
brand, but also from a corporate governance compliance
social media needs to become part of the company's strategy
so that C-Suites and other executives are aware of:
the decisions made about social media internally; and
the content that is being published by the company, or by
others about the company, on social media so that calculated
decisions can be made;
a social media strategy needs to be a tactical plan that is
updated regularly. Such strategy should have feedback from:
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Businesses that rely on email or SMS for marketing purposes need to be aware of, and comply with, the Spam Act 2003.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).