Social media is everywhere. In only a few years, Facebook, for instance, went from being an exclusive network for college students to a dominant social platform with more than 600 million active users. Twitter went from being a cartoon sound effect to a communication network of choice for more than 200 million users. It has reached enough critical mass that the RIMS 2011 Twitter feed has been on display for the first time this year at the RIMS booth in Vancouver. Tweets with the #RIMS2011 hashtag have been coming fast and furious.
But while the rewards of increased customer access are well known, many risk managers are unsure of the threats that social media presents to their businesses. In a standing room-only session at RIMS 2011, entitled “The New World of Social Media: Business and Legal Risks,” Chad Jackson, director of risk management at FedEx, Rennie Mazzi, managing director at Marsh and attorneys Melissa Krasnow of Dorsey & Whitney and Tamara Russell of Barran Liebman, helped educate attendees about those risks.
According to Russell, social media risk is difficult to quantify because employment and labor law have yet to catch up to the reality of its application. One of the more interesting areas of concern that she brought up is the seemingly innocuous practice of Googling a prospective employee—a practice that is actually anything but innocuous since it could run afoul of discrimination laws. Employers could be liable because Googling an applicant is the equivalent of “asking” questions you wouldn’t (and shouldn’t) ask in an interview. Russell’s recommendation is to make sure what you are looking for is pertinent to that person’s employment. “Don’t go overboard and be prepared to backup why you searched,” she said.
Social media policies are one solution but in many cases existing communications policies may already cover some of these areas. Krasnow pointed out that it’s not enough to simply have a policy–you have to be able to implement and enforce it.
Jackson, an admitted social media neophyte, suggested that you don’t have to be an expert to take advantage of what social media has to offer. Risk managers need to come up with a philosophy that fits their business, establish consistent guidelines for the use of social media from both a company and employee standpoint and consider using risk management tools like online activity tracking software to help monitor social media outlets for information relevant to the organization.
Social media can seem like a chaotic mess, but it can’t be avoided. The key, as summed up by Mazzi, is finding a way within your company to “enable the chaos.”
For a more in-depth look at social media risk, check out the multi-part cover story in the October 2010 issue of Risk Management.