“Social media is part of the enterprise risk factors managed at the board level.”
Fortune 50 CMO
Is it important for corporate boards to pay attention to social media? It’s a common question among recent discussions I have had. When it comes to social media risk, yes it is. Social media risk has moved beyond worrying about the comments of a disgruntled customer to real risks to reputation, operations, and compliance. In doing so, it had also moved further up the organization to now where it is a board oversight issue.
In the recently published report by Deloitte and Forbes, social media was identified as one of the top four sources of risk for companies and organizations by C-level respondents. Given the impact of social media across the enterprise and culturally, social media risk is now a governance board level issue for most companies. But yet very few boards are actively addressing the potential risks from social media.
Why Aren’t Boards Paying Attention To Social Media
So why aren’t more boards focusing on the risk of social media? Because in general boards:
- Don’t use social media. Board members who tend to be very busy and are likely are in their 50’s or older aren’t the typical demographic for social media. It doesn’t mean that they aren’t using social media like Facebook, but they don’t have the breadth of understanding of what social media is and can do – both the good and the bad.
- Don’t understand the business side of social media. Even if a director is active in social media, they often misunderstand it because they haven’t examined it beyond the personal use level or they look at social media as just another tactical level marketing channel. But social media has numerous other facets including an customer engagement channel, a support tool, an internal collaboration platform, and as a risk channel.
- Don’t have a strategy. When it comes to social media, many brands don’t have a strategy for what it is they want to accomplish through social media. And because they don’t have a strategy, they don’t really understand the impact social media has on their business, both good and bad. They also don’t have a strategy to deal with the risk of social, and get blindsided when a social media crisis pops up.
Social media is an amazing tool, but it can be a dangerous weapon too. Social media has the capacity to damage the reputation of a brand, introduce malware into corporate IT systems, or cause significant compliance or regulatory problems. Social media also has the ability to exacerbate other risks.The result is that boards are not educated or aware of the risk this new platform potentially presents to their brands.
Why Boards Should Pay Attention
Because directors tend not to “get” social media and the risk that goes along with it, they don’t really pay attention to it. But they need to.
- Social media exposure is now a key part of your brand. Whether you like it or not, whether you are engaged on social or not, a part of your brand reputation is now tied up in social. People are talking to you and about your brand on social. Managing your brand reputation is a board level issue.
- Social media entails risk. Ask any of the large brands who have been through a social media crisis about the risk of social. The risk is there in multiple different forms, and you can’t control it by just not paying attention to it. You have to assess, manage, and mitigate it like any other risk. Oversight of risk including social media is a board level issue.
- It is a key part of the future. As much as some would like to go back to the days of Don Draper, how companies are shown to the world and how they are perceived has changed forever. The future involves social media and we can’t go back. So instead of ignoring the future, why not embrace it and include it as a key part of your business strategy? How about your risk strategy? Determining the strategy, including social media, of the firm is a board level issue.
So what should boards do at a minimum?
Pay attention. Pay attention to what is happening in the world of social – both the good and the bad. I was recently told of a board for a company in the energy space who gets a monthly report on how the company is doing socially, but also what else is happening in the social world including any crises, successful campaigns, and emerging broadly adopted technologies. Not a bad practice.
Baseline your social brand. If the board doesn’t already know who is in charge of social media, what channels the brand is on, what the policies are around social media, what the brand is trying to accomplish, and what the risk exposure is, now is a great time to figure it out. Note that all of these go together. All your great efforts can go down the drain without having a risk management plan in place.
Create an initial social media strategy. Create a strategy, even if it is only for the next six to twelve months, that covers the desire outcome and goals, who the target audience is and where you can find them online, how you will listen to the ongoing conversations, how you will engage and create value, what tools and platforms you will use, how the effort will create value, and how you will manage risk.
Put a crisis response plan in place. Hopefully you will never need it. But if you do suffer a crisis, you can’t create it on the fly. So make sure the hard work is done now and be prepared with a crisis response plan