Exploring Corporate Governance Around the World

By Allison Garrett, Senior Vice President for Academic Affairs at Oklahoma Christian University

Monday, November 06, 2006

More on CEO Blogging

About a month ago, I blogged about Sun Microsystem's CEO asking the SEC for guidance on whether a blog could be used as the shareholder communication vehicle under Regulation FD. That posting is here. Now, Christopher Cox has responded to Schwartz's inquiry. The response and Schwartz's musings about it are posted here.

In the response letter, Chairman Cox noted, "[A]corporate website is a tremendous vehicle for the broad delivery of timely information (and in the case of Sun, you note that your website receives an average of nearly one million hits per day). Many other companies are finding that this is true, and increasingly are posting significant amounts of information on their websites. Indeed, because information that is not "selectively disclosed" or that is not material nonpublic information is not subject to the public dissemination provisions of Regulation FD, Sun and other public companies can already do this without implicating the provisions of Regulation FD."

In other words, the Internet is a great tool and CEOs and their companies are welcome to post all sorts of interesting information on their web sites and blogs, so long as the information isn't selectively disclosed and isn't material non-public information.

Although shutting the door for now on the use of blogs and websites to comply with Reg FD, Chairman Cox did note an interest in discussing the issue with interested groups. In light of the lukewarm response from Cox, I doubt that many executives will start blogging as a way to communicate with constituencies on important issues. Everyone will wait to see whether the SEC can work out how the Internet can be used to broadly disseminate material information. Funny thing is, though, that the Internet seems to be a far more efficient way to disseminate timely information than other ways.

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