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Archives for August 2008

Hyperlinks to Third-Party Information

In its recent Interpretive Release, the SEC addresses links to third-party information from a company web site.  This new guidance applies only to the liability a company might face for purposes of the antifraud provisions of the federal securities laws.  This guidance in no way alters their position as it relates to the Securities Act.

Rules in the Exchange Act may hold a company liable for third-party information that it links to from its web site if it could be attributable to the company.  In the 2000 Electronics Release, the SEC stated that such information can be attributable to the company if either the company was involved in the preparation of the information, or if the company explicitly or implicitly endorsed or approved the information.  Not surprisingly, it is the “implicitly” that makes company lawyers nervous.

The three factors delineated at the time by the SEC, context, confusion, and presentation, left plenty of room to be nervous.  So, there is some new guidance to answer the principal question:

“Does the context of the hyperlink and the hyperlinked information together create a reasonable inference that the company has approved or endorsed the hyperlinked information?”

Here is where it gets scary.  The SEC states that they “begin with the assumption that providing a hyperlink to a third-party web site indicates that they company believes the information on the third-party web site may be of interest to the users of its web site.”  Further, the SEC states that “The degree to which a company is making a selective choice to hyperlink to a specific piece of third-party information will likely indicate the extent to which the company has a positive view or opinion about that information.”

Yikes!

I know what you are thinking.  You’re thinking, “No problem, we’ll just put a notice that we don’t endorse the information and we’re done.”  Unfortunately, that is not going to work.  The SEC states that a disclaimer or “exit notice” alerting users that they are leaving the company web site and accessing an unendorsed web site is not sufficient.  One example cited is a company that links to only one stock analyst web site and that site happens to have positive information while other analysts who might be more negative are not linked.

Best Practices

So, where does that leave our IR web pages?  First, while notification is not a free pass, it is still useful in making sure that web site users are aware of when they leave the company web site and that where they are going is not endorsed by the company.  To achieve this, an “exit notice” for every off site link on the Investor Relations pages is a must.  No, it doesn’t let the company off the hook, but it does let the investor know what is going on and is the first step in making sure there is no endorsement.

The second task is a little more complicated.  The fewer links that exist in any one area or page, the higher the probability that those links can be considered selective.  On the other side, the lower the quality of the site or page being linked, the higher the probability of that link being considered misleading.

Your best bet then in providing links is to follow some basic ground rules.  First, when it comes to analysts and research, never link to just one.  Always have multiple links.  A good way to get multiple links without having to worry about quality is to link to the big independents like Thompson or Morningstar if they have research about your company.  Finally, determine if the links really belong on the Investor Relations page or if they would be better located elsewhere.  Links from the IR page will take on a heavier weight than those on other areas.  If the company wants to showcase recent charity work, link from the Community Involvement page or the Recent News page.

Again, none of this is earth shaking news, but a couple ounces of prevention is always worth a pound of cure.

The Importance of FAQs in Recruitment

FAQs or Frequently Asked Questions are important in every business sense but perhaps especially in Recruitment.

Upon application, there are a lot of things that applicants usually ask. Some of these questions could be shrugged off as something that is not important, but for the applicant it would really be a great help.

Take for instance the acceptance of online application. Some candidates would assume that all applications could be submitted online. If there are positions that really need personal appearance at the on-set of their application, it would be better if the applicant could be informed first-hand as opposed to wasting their efforts and knowing in the end that they would be processed much easier if they are a “walk-in” applicant.

Aside from answering normally asked questions, FAQs could also serve as a way to explain the norms and culture of the company in terms of considering candidates, interviewing them and the status of the position that the applicants are interested in. Here is one good example of an FAQ from Tesco’s careers homepage:

Can I apply through this careers site for Store based or Distribution roles?

We currently conduct all local recruitment for Team Members / General Assistants through each local location. Use the Store Finder to find your nearest store or else our Distribution Centre Finder to find the contact details of your nearest Distribution centre. However all office support and management positions are advertised on and applied for through this site.

Remember that the best approach in an FAQ is a casual yet a very explanatory manner. Through this way, you are still enticing candidates to apply but at the same time still informing them about the things that they should expect when applying and the characteristics that they should have in the first place.

Procter & Gamble Seeks Creative Input from Consumers

In a growing trend, Procter & Gamble is turning to consumers to help create a tagline for its new Crest Whitening Expressions toothpaste flavor through a contest on YouTube and supported by a print and television campaign filmed in American Idol-style with Emeril Lagassi as one of the judges.  The campaign was created in part by Saatchi & Saatchi New York (TV) and Digitas New York (online).

In an article in Brandweek, Blake Cahill, senior vice president of sales and marketing at Visible Technologies Seattle was quoted as saying that the campaign is an example of how brands are relying more and more on consumers to provide creative content as ideas from consumers prove to be, “many times more creative than what their own agencies deliver.” [Read more…] about Procter & Gamble Seeks Creative Input from Consumers

How Corporations Can Get On “The List” As Blogging Forces

What message does your company have or what product does it offer to consumers? Is it worth talking about or sharing with others? Corporate blogs are becoming increasingly popular as a part of the media package that companies are using to reach the public, investors, consumers and even their competition. Corporations are using blogs as a way to reach out and share a message, tell a story or simply to increase productivity.

Starting a corporate blog requires more than just desire. Although desire and energy are optimal for its success, the blog must also serve a business purpose in helping the company to achieve certain objectives and also in furthering their mission. Most companies that start a corporate blog have ideas of writing or blogging that will invariably skyrocket their business or take their business into a new phase of commerce. Generally, this doesn’t happen with corporate blogging, at least not right away, as effective blogging takes time to build and requires careful consideration of the blog’s style and tone. It also takes time and diligence to find bloggers who can appreciate hard work and have the ability to produce quality, consistent content that engages the audience. Doing these things on a regular basis will help the blog in achieving its goals for the corporation. 

Reasons to Start A Corporate Blog

Before a company decides to start a corporate blog, several things should be considered: 

  • Who is the businesses core audience?
  • What is the ultimate goal for blogging? To entertain? To educate? What is it that the business wants to accomplish?
  • Are there any capable, passionate bloggers on staff, or will the organization need to outsource to freelance writers? 

In most cases, these questions have either already been answered or everything is already in place for the organization to start a blog. However, there may still be reasons for you to question whether or not a blog is right for your company. Consider the following reasons as to why companies start corporate blogs:

To Discuss Current Events

As a part of the corporation’s social responsibility to the community, many corporations start and maintain a company blog to show their awareness of current events. If they are supportive or perhaps non-supportive of the message in any current events, companies often use their blogging (voice) to show concerns, displeasure or simply to give their opinions. This is also why it is imperative to use professional, efficient and passionate bloggers who have detailed research capabilities. Bloggers who stay involved in current events seem to be able to connect to the audience more, engaging them in the conversation and keeping their interest as they relay news and information.

To Create Credibility

Organizations who wish to establish themselves as authorities in their field readily publish professional blogs to instant credibility. The organization’s popularity increases, as does their brand name and recognition as they begin to garner attention as leaders in the industries and become the preferred first contact for consumers. Companies also create credibility when they exhibit social responsibility, handle controversy in a professional manner and address issues that are debatable for their industries. All of these things show that the company is not afraid to venture out and has a voice when the subject matter is sensitive. Issues that require a sensitive voice in blogging have a fine line with which to establish their credibility, therefore must be handled carefully, methodically and consistently so as not to alienate the blog’s audience. 

To Facilitate Interaction Between Employees and Customers

This by far has to be the biggest perk of a corporate blog. Getting the interaction going between your employed bloggers and the customers that you wish to reach can be a match made in heaven. Take a look at the blog maintained by McDonald’s hamburgers. What is consistent about their corporate blog is their openness and willingness to discuss issues of all subjects; community responsibility, questions on the nutrition of their food products and information on current events on local and national levels. From glancing at their blog and scanning a few articles, you can see that their blog is very engaging, succinct and makes the reader want to come back for more information.  

To Increase Performance on Search Engines

Finally, the likeliest reason for most corporate blogs is to potentially increase their performance on major search engines. This is perhaps the main reason why corporate websites invest numerous financial and human resources in order to have their websites compete for the top search engine rankings. If a website seeker searches for information that is high relevance for a corporation’s blog, the corporation covets to be the top search in that specific subject. Blogs that are maintained on a frequent basis have an increased chance in ranking well and high in the top search engines. Bloggers know this and strive to write fresh, compelling and engaging content that will keep the interest of the blog’s audience.

Incorporating these measures into any new or even existing blog on a corporation can be extremely helpful in the beginning stages of any company’s new media role. These reasons and suggestions can also be beneficial in helping any corporation make it to lists of corporate blogs who want to establish themselves in Internet commerce and awareness. Blogging is a key step in achieving that goal.

Has your company started an interactive blog to increase awareness or increase business? What are some things you’d like to see included on corporate media blogs?

Good Corporate Governance – Ethics Hotlines, But…

BusinessWeek published its Best Corporate Practices in January. I noted with some interest that the #6 best practice was an Ethics Hotline.

All employers talk about ethics, but the ones who provide a way to report misdeeds are the ones most likely to catch problems. Confidential ethics hotlines allow employees to anonymously report bad actors without taking their chances on the dreaded “chain of command.”

This has implications for Corporate Governance.

Most discoveries of fraud are by employees. Since Sarbanes-Oxley there has been much interest in Ethics Hotlines. You might think that there would be an increased employee use of these Hotlines. Well no, according to the Ethics Resource Centers’ 2007 NATIONAL BUSINESS ETHICS SURVEY, employees seem to be reluctant to use these Hotlines.

Reasons why employees avoid hotlines include cultural taboos on “snitching” and lack of awareness. However the main reason is fear of retaliation. Even when the hotline is outsourced, there might still be the fear that anonymity cannot be completely guaranteed.

The key learning is that Ethics Hotlines must be viewed as one alternative in a menu of practices to report ethics violations. Companies should not think that once a hotline is in place that nothing else needs to be done.