Most companies issue full-text press releases via nationally recognized newswires to communicate with the public. Some are brief, purely public relations communications. Others, such as earnings releases, are longer and more detailed. You may not realize that newswires charge by the word or, if you do, you may not be aware of how much the cost adds up over time if your company frequently issues press releases.
Increasingly, companies are significantly reducing this cost as follows:
- Post the full-text, long-form version of the press release on the company website;
- Issue a brief short-form press release via newswire merely referencing the subject matter and directing the public to the long-form press release’s location on the company website; and
- If the press release contains material, non-public information, disclose simultaneously the long-form press release as an exhibit under Item 7.01 of Form 8-K.
In addition to saving money, this technique also dovetails with the trend toward driving investor relations traffic to your website. The SEC’s ultimate goal, over the next few years, is for websites to become an acceptable, alternative means of public disclosure. In fact, current SEC guidelines already support this concept, but only for a handful of the most closely followed public companies.
This practice also may enhance the public’s perception of your company as promoting disclosure transparency and progressive use of technology. A further corollary benefit would be increasing internal focus on keeping your website up-to-date, which is a frequently overlooked component of effective public disclosure and liability avoidance.
Additional Articles from the Fall 2011 Public Company Forum:
A Proxy Advisor’s Negative Recommendation on Say-on-Pay: How Much Should You Care?
Director Diversity = Dollars
Is it Bigger than a Breadbox? Navigating Materiality
Dodd-Frank Act Progress Report: Fall 2011