Do you personally communicate via social media? How many of your directors have personal social media accounts of their own, or are actively engaged on such channels in a professional capacity? Whether you and your individual directors utilize or shun it for personal communications, social media represents an increasingly critical form of marketing, engagement and feedback.
Even if you and your directors don’t have personal social media accounts, you’re likely to have seen evidence of the power and impact that social media can wield. Beyond communicating with clients, prospective clients, shareholders and other stakeholders, businesses, public sector organizations, NFPs, NGOs and other entities are functioning within an era of environmental, social and governance (ESG) issues. Shareholder activism and expectations are facts of life, and social media is a tool of choice. Those who ignore it do so at their own peril.
Social media represents opportunity as well as risk; both factors contribute to this being yet another area of oversight responsibility for boards. If directors and boards are going to get it right, they need to understand the ramifications of their respective organizations’ social media strategies. This is why boards have begun adding related expertise to their matrices, and now recruit for directors who have qualifications that will strengthen the board’s ability to provide effective oversight of their respective organizations’ social media usage. Whether or not your board membership already reflects social media and communications expertise, the board needs to wrap its head around this aspect of oversight.
Board’s Role in Overseeing Social Media
Has your board had the social media equivalent of “the talk”? This is another opportunity for corporate secretaries and other governance professionals to add value, and to assess current practices. Do your onboarding and board development programs include education on oversight of the organization’s social media usage, and what the board should consider? Review your board calendar and work plan; has oversight of social media usage found its way onto those documents, and into discussion of the organization’s risk register and heat maps? Social media posts that are critical of an experience or organizational performance represent reputational risk – as does the degree to which the organization is equipped to act on potentially viral negative publicity should it occur.
Organizations must already consider privacy in the context of General Data Protection Regulation (GDPR) for any EU stakeholders, and legislators have begun to consider social media regulation. Whether or not the organization will undergo additional scrutiny, implying expectations of higher standards (and increased costs) as a result of legislation, your organization’s clients and other stakeholders may be elevating their own expectations of the security of their personal information. As stakeholders limit profile access and take greater control of their privacy settings, the organization will need to be prepared to assess and potentially adjust its customer and stakeholder communication strategies.
There are also risks inherent in company officers’ and employees’ social media usage. What does your CEO’s social media strategy look like? Has the board given it any oversight? In the US, the Securities and Exchange Commission (SEC) has demonstrated its preparedness to investigate not only CEOs’ communications, but also board oversight (or lack thereof) into such executives’ social media communications. Read about the SEC’s investigation following Elon Musk’s August 2018 tweets about changing Tesla’s company status from public to private. The outcomes extended beyond the securities fraud charge that Musk settled and the $40 million in penalties assessed on Musk and Tesla; they included changes to board composition and leadership, and the establishment of a new board committee to support better governance and oversight.
Has the board considered whether there are policies in place for well-intended, engaged employees to guide them in their social media usage? Whatever the motivation, an ill-thought-out or miscalculated post that’s deemed inappropriate has the potential to generate reputational (and, therefore, financial) harm.
If your board has yet to invest time and energy on oversight of social media usage, you may want to recommend an education session during an upcoming agenda or strategy meeting. These conversations or education sessions can be held in the context of both opportunities and risk management. Management may not envision tabletop exercises for scenarios involving a disparaging post gone viral, but the board has a right and a responsibility to know that management has developed a plan to mitigate and manage such risks.
Individually and collectively, directors have a responsibility to learn how the organization uses social media – and whether the organization has the requisite budget, expertise, technology and structures to support effective social media communications, data collection and storage.
The Company’s Social Media Plan
There’s more. Directors need to know which platforms the organization uses and how such communications align with and support execution of the strategic plan. The board should also ask questions about social media usage on the part of the organization’s stakeholders, and the organization’s monitoring practices, to ensure awareness of what’s posted about it on social media. Who determines the criteria to be used in assessing whether to respond to any given unfavorable social media post, and how?
In addition, the board should seek to understand whether the organization’s social media strategies align with stakeholders’ expectations and communication trends. Just as boards need to be educated, so, too, do employees. Are there any restrictions on employees posting about their workplace via their personal social media accounts? Are disclaimers about such views being an individual’s, and not the organization’s, adequate protection? Do employees know about any such policies, and how is such information communicated to them?
Boards will own policy development associated with management’s public social media messaging, and they will oversee policies associated with employee social media usage. Here, the board can apply the same principles it follows when it comes to other important policies. Your board likely poses questions about how the organization communicates information about its Code of Conduct and related policies, for example. It’s likely that the board also follows up with questions and regular reporting on compliance monitoring, reports of breaches, and consequences for breach of policy. The board may wish to take the same approach to the organization’s social media policy.
There’s a lot to be said for the governance career, and board oversight of social media usage is just one more example of why this is a stimulating career path. There’s always another learning opportunity, and another nuance to governance, just around the corner.