Trying to parse the opaque language used in the guidance is not easy, couched as it is in unhelpfully vague terms. That doesn't stop the social media mavens from declaring a new dawn for the so-called social media press release:
The SEC is taking the right steps to embrace the new tools and services that reach people in addition to wire services. With the recognition of blogs as a viable form of disclosure, under certain circumstances of course, the SEC is officially recognizing Social Media and in a sense, socializing the rules associated with Reg FD.
Perhaps, the most significant change stemming from the new SEC guidance is that Web-based disclosure does not have to appear in a format comparable to paper-based information, unless the Commission’s rules explicitly require it.
This is music to my ears as it finally opens the door for the Social Media Release.
Right now, the only bright spot for enterprise software sales is in governance, risk and compliance. It is BIG business. At a practical level, GRC is about managing business processes. Does anyone seriously imagine that with a stroke of the legislative pen that the SEC is opening the floodgates for any random corporate blogger to use social media as a new form of corporate mouthpiece? Of course not.
Companies struggle as it is to figure out what to do with these new forms of media. Only the other day, a senior executive in a large company said: "It's not the technology that worries me, it's the change control to ensure we don't shoot ourselves in the Sarbanes-Oxley head." It is a fact of life that 99% of the press releases I receive are in a form that hasn't changed in the 17 years I've been commenting on the industry. If the tech sector can't get its social media act together then what chance the rest of the world?
In conversation with Neville Hobson, we agreed that the press release format isn't going away any time soon. But I'm not as gung-ho as Neville who is convinced that some 'smoke stack' companies will come into the fray and break what he sees as a log jam of inattention.
What this new guidance does is add fuel to the regulatory oversight fires. The Big Four audit companies have successfully put the fear of prison front and center in the minds of C-level officers, reaping the increase in fees that go with it. However, they have been almost derelict in their updating of testing services for today's complex ERP. What possible hope they have of providing guidance in this area is beyond my comprehension. Probably more FUD to follow. Heaven forbid that the marketers get involved. With limited exceptions, they struggle to make demonstrable use case arguments.
However, there is a case where the notion of social media as a prime delivery tool takes on genuine value. If, as has been argued elsewhere, one of the Big Four collapses and this guidance is fleshed out to be meaningful, then the whole question of corporate public disclosure becomes a major talking point.
Imagine this: the entire value of traditional audit comes under question. What replaces it? A carefully orchestrated stream of transparent information that can be parsed through links. There will, in other words, be no place to hide. Corporations will be forced into acting in a very different manner to the command and control structures I see every day of the week.
This leaves legal departments with an almighty headache. As one PR person said to me the other day: "What starts as a great idea almost always ends up as a series of empty statements once it's been through the legal meat grinder." In this 'new' world, that becomes very difficult to sustain.
The implications for those selling GRC solutions is enormous. It's a topic to which I expect to return.