Social Media and the Boardroom: Much Work Remains
Richard Levick recently wrote an interesting article in Fast Company, Social Media And The Boardroom: Critical Questions Directors Need To Ask. There is a convergence here of increasing responsibilities for boards of directors and the increasing power of social media. As Richard wrote, “from Sarbanes-Oxley to Dodd-Frank, directors have been subjected to new liabilities and new mandates for elevated levels of transparency and accountability.” At the same time social media has emerged from its niche marketing role to impact every company in many ways.
Richard writes, “Social networks are the venues where purchasing decisions are increasingly made, investment opportunities are increasingly weighed, and corporate adversaries--such as social activists and the plaintiffs’ bar--increasingly gain public support for their agendas.” Yet directors are often not looking at its impact. He reported on a study by Stanford University’s Rock Center for Corporate Governance that asked 180 top CEOs, senior executives, and corporate directors how they approach social media’s opportunities and risks.
There is an awareness of what social media is and its potential impact but few pay attention to it as 90% report a basic understanding of this now established fact. However only 32% of their companies monitor social media to identify risks and only 14% measure social media sentiment about their organization. It gets worse, as only 24% of senior managers and 8% of directors actually request regular reports on their company’s social media engagement efforts and stakeholders’ social media sentiment. Then about half of the respondents do not even collect this information.
These are people who use social media as 65% of use social media for personal purposes and 63% utilize them for business purposes. Of that group that uses social media, 80% maintain a LinkedIn account and 68% are active on Facebook. It is surprising that they cannot connect the dots. This is not rocket science.
If they do manage to take their head out of the sand or off their own Facebook page (note 350 million suffer from Facebook addiction), Richard offers ten useful questions for them to ask gathered from three PWC audit people: Catherine Bromilow, Chris Wood, and Neil Manji. I will not steal their thunder or Richard’s as he lists them with commentary but they all make common sense.
Basically, boards need to take a comprehensive look at all aspects of usage within their organization, including how they, themselves, are using social media and its impact on their organization. Otherwise they will get some personal surprises and their organizations will fail.