SOCIAL MEDIA RISKS

Social media (SM) enables two-way communication and collaboration. Organisations can (and have) utilised it to great success building a competitive advantage, generating business and engaging with their customers on a more personal level.

For every SM marketing success, however, there are a dozen examples of organisations getting it wrong. A single public failure can have far greater ramifications than multiple successes. Boards and management teams must be aware of, understand, and manage the risks that online conversations may present to their business.

“Today’s customers expect that the organisation they do business with will be ‘on’ social media and will be contactable via the most prominent platforms such as Twitter, Facebook or LinkedIn.”

This two way communication increases opportunities to connect with customers and prospects but also increases risk, especially as corporate regulators and bodies (such as ASIC, ACCC and the ASX) are already announcing compliance requirements and guidelines with respect to social media use.

A fundamental question you must ask is whether your marketing department  is aware of these guidelines – let alone the risks to reputation and your bottom line. Most SM activities will come from a marketing perspective, without necessarily including an eye to risk management.

Risks you need to watch out for

  • Social media risks fall under three main areas, operational, regulatory and reputational (SM can be a risk itself, or alternatively, it can accelerate traditional risks).

 

  • Operational risk can involve copyrights, employee non-compete and confidentially agreements, monitoring employees on social media, who ultimately ‘owns’ the content you post on LinkedIn, Facebook, Twitter, etc.
  • Regulatory risk is all about ‘public-company disclosures’ and what official information is made public, when and by whom. If you tweet ‘great numbers’ before your actual numbers are released, what disclosure rules have you just broken?
  • Reputational risk may be dealing with what you or your employees say online as much as what others say about you (and how you react to that).
  • Additionally, SM can result in supply chain risk and business continuity issues through to IP and confidential information leakage. These impacts are occurring with a speed and frequency that often catch many organisations by surprise.
  • Training is critical to ensure SM is an asset for your organisation, ensuring everyone is vigilant but collaborative about getting it right.

Ultimately, regardless of all of the procedures you put in place, there is one thing you need to do: be vigilant. Create a culture where everyone in your organisation understands how to protect your business brand and their own personal brand.

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