Five reasons why risk managers should get social

 James Leavesley (pictured) outlines why risk managers need to join the social media revolution.

Social media is no longer just the latest buzz word or an experiment for creative marketing teams. Organisations are fast recognising the importance of social media from a customer, employee and business partnership perspective.

Companies are using blogs, videos, Facebook and Twitter to connect with ‘communities’. However, it only takes one disgruntled customer to take to Twitter, You Tube or Facebook and the results can be costly. Even worse damage can be done by a rogue employee with access to corporate social media accounts and a determination to discredit the company.

So here are five reasons why risk managers should get up to speed with social media and how to control it:

1) Defamation and the law

Not many people realise that posting, Tweeting or Re-Tweeting a libel will leave the person or organisation involved open to prosecution. The position is no different to that of email in the early days. A Tweet, any social media post or email which expressly or implicitly makes adverse comments about others can easily be forwarded or Re-Tweeted and it is always unpredictable what will go viral.

The original person/poster can be liable for all subsequent reposts. The Defamation Act 2013 has strengthened the protection for channels such as Facebook and Twitter, which will encourage those who have been libelled to pursue those responsible for media posts or reposts. This leaves organisations open to legal action if an employee or corporate account is involved. It is essential for risk managers to know where an organisation stands in the event of something going wrong.

2) Loss of control over social media assets

It is commonplace for organisations to empower their employees or marketing agencies to create social media accounts on their behalf. But who owns these accounts and who has ultimate control? Accounts can be set up in minutes but who is responsible for keeping track of these new communication channels.

Risk managers need to be sure that social media policies are consistent with contracts of employment and that employees are aware of their responsibilities. There should be processes and technology in place to manage posts both internally and from third party agencies. Regular audits are necessary to establish how many accounts represent the company and who controls them. However, these can become time consuming and costly without the right social media risk software in place to manage activity.

3) Sharing confidential information

Employees need to be aware that their personal social media accounts will be linked to their employer and therefore could come under scrutiny. An example of how unprotected social media activity proved disastrous for one newly-appointed chief financial officer at US clothing retailer, Francesca’s, highlights the point. After a confidential meeting, the CFO Tweeted: “Board Meeting. Good Numbers = Happy Board.” Francesca’s is a publicly traded company and the CFO was dismissed for sharing confidential inside information. An easy mistake but a risky one which could have been avoided with the right awareness and preparation.

4) Brandjacking

Brandjacking occurs when someone assumes the online identity of another entity for the purpose of acquiring that organisation’s brand equity. For example, immediately after the Deepwater Horizon BP gulf oil spill, a fake Twitter account @BPGlobalPR appeared with sarcastic and inappropriate Tweets from a fictitious BP spokesperson. In just a few days, the account had accrued tens of thousands of followers. While it is not possible to completely prevent brandjacking, listening across social media channels to find out what is being said means fake accounts can be intercepted and ultimately legal action taken. However, companies first have to be aware what is happening and able to respond quickly.

5) Social media is good for business

There is no doubt social media is good for business. With some analysts quoting as many as 46% of online users referring to it when making business decisions (Nielsen, 2013). However, in common with any risk – normal rules apply. Risk managers need to be able to identify, record and mitigate social media risk and a good place to start is with a rigorous social media audit and the right risk management technology in place.

James Leavesley is CEO of CrowdControlHQ.