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. 

Comments

[Sage Aumick]

That is right, Bill. The use of social media is a continuous work. Reading your post, I find the numbers unsettling, especially the part about the small percentage of companies that take into consideration the social media sentiments about their organization. In social media, every detail matters, and the bad sentiments come into every territory. As a marketer, you have to take the good with the bad, and make things better.

[Bill Ives]

Sage

Thanks for your comment. This is a very under used potential and the transparency of social media is one of the main benefits.

[Staci Burruel]

The statistics is indeed baffling. Nowadays, consumers use social media platforms to connect directly with companies for so many reasons. I think companies should take some time and effort to heed these “social media calls” to better understand their target audience. This will not only encourage brand loyalty, but can also serve as a reference to know how consumers view your company.

[Jean Bridges]

The growth of the social media industry is skyrocketing. We can expect this trend to grow further, as more people embrace the digital world. This means a lot of opportunities for businesses, since promoting products/services online is cheaper compared to the conventional ways of promoting products and services.