Should Your Company Have a LinkedIn Company Page?

5 minute read

Should Your Company Have a LinkedIn Company Page?

By Small-Cap Institute.

We get asked this question a lot, and it has become increasingly clear that companies are often recipients of confusing and sometimes dubious advice in this regard. Though subject to a few caveats, the short answer – particularly for small-caps that are predominantly retail-held and traded – is… yes.

Three quick caveats: (1) social media and communications more broadly aren’t a one-size-fits-all endeavor so companies need to do what’s right for all stakeholders; (2) companies should have social media policies1, and they should be strictly adhered to; and (3) counsel should be involved in the implementation and maintenance of any social media undertakings by public companies.

The longer answer has several components.

Buy-side research. As Gordon Gekko famously said in Wall Street: “The most valuable commodity I know of is information.”

Seasoned investors garner information from wherever they can. There are the obvious places like company websites, SEC filings, analyst reports, Bloomberg, Capital IQ, Yahoo Finance, global business newspapers, and Google.

But there are also less obvious places like Glassdoor, industry publications, competitor investor presentations/earnings calls, investing clubs, and social media (e.g. LinkedIn, Twitter, and Facebook).

When investors peruse corporate social media postings – particularly those on LinkedIn – they are often trying to determine, among other things, whether the company’s social media strategy is intentional, if the company is prone to hyperbole, whether the postings are widely followed, and who appears to be engaging with the content.

Companies without a well-rounded company page on LinkedIn are potentially sending investors a cautionary message: “Engaging with stakeholders isn’t important to our company.” And in situations where several competitors have active, well-followed LinkedIn company pages and one doesn’t, the abstaining company risks a further, potentially damaging message to investors: “We’re not in it to win it.”

Surround sound. Every micro- or small-cap company with a largely retail shareholder base knows that effectively communicating with retail investors is challenging. Nonprofessional investors are a notoriously fragmented group, and there is no single effective method of reaching them. Accordingly, many capital markets veterans refer to the collective channels of communication with retail investors as “surround sound.” In other words, successful retail outreach is often a confluence of many different vectors beyond websites, press releases, regulatory filings, and investor presentations.

While reasonable people might well differ as to whether it should be this way or not, social media is an increasingly important component of “surround sound.” Smaller public companies with retail shareholder bases are simply communicating incompletely if social media is not part of their outreach. And since LinkedIn is the most business-oriented social media platform, it’s naturally a focal point. On top of that, LinkedIn ranks very highly in Google searches, giving further presence to your company.

While not every retail investor is going to access a LinkedIn company page or make their investing decisions based exclusively upon it, smaller public companies in particular are missing an important opportunity to engage with existing investors and attract new ones by failing to have a welcoming presence.

Media. Whether it’s a Pulitzer-prize winning reporter, a programming manager at a national business television show, or an industry blogger, an inordinate amount of content ideas and story research is undertaken today on social media.

Great storytelling doesn’t just stand out in 1-on-1 meetings and on websites, it also stands out on social media. The easier you make it for media outlets to understand and engage with your company, the more likely it is that your company can benefit from the ensuing coverage.

When public companies don’t have an active LinkedIn company page, it sends a message to media that’s similar to the message to investors: “There’s nothing very interesting going on here, and even if there were… we can’t be bothered to talk about it.”

A Few Closing Thoughts

While having a company page on LinkedIn can be important for smaller public companies, it’s not without risks.

Garbage in, garbage out. Much like a blog, a LinkedIn company page needs to be routinely and thoughtfully updated, lest stakeholders think it’s an afterthought. Anything worth doing requires consistent effort, and social media is no exception.

Don’t let your guard down. Though a LinkedIn company page is obviously a less formal ecosystem than a SEC filing, smart companies know to stick to the facts and ensure that the tone they adopt on LinkedIn is consistent with other corporate messaging.

Consider skipping the “like” button. State and federal securities regulations apply to all public company communication. “Liking” a third-party comment on a LinkedIn company page might seem innocent, but it could also give rise to speculation that a company is endorsing a particular point of view or even ratifying speculation about upcoming results.

1Effective social media policies focus on who within an organization is able to post corporate content, when they are able to post, where they are able to post, and what they are able to say. Like any “policy,” a social media policy is only as good as its clarity and compliance mechanisms. For some other thoughts regarding CEOs and social media, keep reading here.