The CEO's fiduciary obligations to the company and its shareholders don't end when they are gone. They must continue to act in good faith. It can be challenging to navigate the lines between company communications and personal voices in today's social media-connected world.Tweets by CEOs can cause serious reputational problems for their company and raise concerns about their brand. However, posting inappropriate things at the wrong times can lead to breach of fiduciary duty and could even be a violation of securities laws.Although reputation and goodwill can take time to build and are hard to maintain, it takes just one tweet to ruin it all.There are three types of fiduciary duties: (1) Duty of care CEOs must act with good faith and care for others in similar circumstances. (2) Duty of loyalty CEOs should put shareholders' interests and the company's best interests first. (3) Duty of good faith CEOs need to act honestly and fairly towards shareholders and the company.Twitter is a powerful tool that can be used, it's not to be denied. If used correctly, Twitter can help to build a company's reputation and strengthen consumer relationships. It can also drive business profits. Tim Cook's tweeting habit about Apple customers shows his customer-service values. This can lead to a larger and more loyal following.More CEOs are using social media to communicate their views on important issues to their consumers. This allows them to be more relatable, authentic, and to show their corporate values and personal beliefs. Nearly 60% of S&P 100 CEOs, unicorn CEOs and Fortune 500 CEOs retweeted, Black Lives Matter, following last year's murder of George Floyd.Twitter can be used to demonstrate transparency in policy. Social media can be used by CEOs to announce new management initiatives, capabilities expansions, and new investments in employees (diversity projects, new roles, organizational changes, etc.). They should use positive tone and talk about the company's future direction. These announcements can be positive for stock prices.It wasn't so long ago that the entire world was obsessed with Donald Trump's tweets and their connection to the stock market. Words are permanent and can have a devastating impact. CEOs have a high role as leaders and representatives of the company. They also have fiduciary obligations and must be careful about what and when they speak. It all boils down into awareness, common sense, and the law.Stick to the facts and don't break the lawSEC Regulation Fair Disclosure (Reg. FD) states that U.S. publicly traded companies may not divulge material nonpublic information to any group, whether intentionally or unintentionally.CEOs, regardless of whether they are a private or public company, are corporate officers. They owe fiduciary obligations to their shareholders and companies. Fiduciary duty demands that CEOs act in good faith, use their best business judgment, and act in the company's best interests. This applies whether they are on Twitter or in the boardroom.
