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Avoiding Social Media’s Legal Pitfalls

Social media is now a standard communications tool for businesses, with many companies regularly using Facebook, Twitter and other social networks to engage with the public. More and more businesses are hiring social media specialists whose sole responsibility is to be the company’s “voice” on these platforms. But this activity comes with risk for both the organization and the individual. The potential for any posting to be retweeted, shared or even go viral underscores the need to be aware of the rising legal risks associated with your business’s social media accounts.

Potential Defamation Lawsuits

The first tip for anyone engaged in social media on behalf of their business or employer is obvious, but not always followed—think before you post. Even if the tweet or post contains an unintended error and is deleted immediately, postings can still be pulled and reposted or retweeted by others. Once something is out there on social media, however, you’ll need to deal with the consequences. Although the laws surrounding social media are still developing, it is possible for a business to be hit with an expensive defamation suit based on a single posting or comment.

Since most posts on social media pages are generally shorter than what a business normally has the space to say in a traditional publication, sales pitch or marketing brochure, the lack of context can present a greater risk of defaming someone or another business. Think about it like this: If a customer comments on a business’s Facebook page asking about one of their competitors, an employee might reply that the competitor provides “untrustworthy service” without much context or explanation to back up that claim. Just those two words have the potential to spiral into a defamation suit if the competitor feels the comment was untrue and harmed their reputation. Since most online statements are brief, it would be more difficult in court for the person posting the comment to prove that he or she is entitled to the same legal defenses available to a traditional publication, even if the post was true or was an opinion rather than a statement. To minimize defamation lawsuit potential, every comment, posting, tweet or retweet should be completely factual and have a positive tone. It is not always possible to check every post before it is published, but anything potentially controversial should be read by another pair of eyes before clicking ”submit.”

Personal versus Professional

Another still-developing area of social media regulation is the distinction between personal and professional profiles or accounts. Businesses are legally accountable for anything tweeted, blogged, or posted on the company’s social media accounts. But this is where it gets complicated; it is possible for a company to also be held responsible for what an employee posts on their personal accounts, especially if it’s not clear to the reader whether they are speaking on behalf of the company or only for themselves. Here’s an example: An employee who works in the food industry posts a photo to his Twitter account of himself handling food in an unsanitary way. Even though the employee may have meant it as a private joke for his followers, any customer who sees the photo could sue that business for lack of training and unsanitary conditions.

To proactively prevent this type of situation, it is important for employers to have a social media policy outlined in their employee handbook. Depending on the business and applicable law, it may also be beneficial to establish upfront that employees’ public social media accounts may be monitored. It is also worth considering a handbook policy stating that any work-related posts on an employee’s private social media accounts are not allowed, and the violation of this policy could result in termination. Some organizations require employees who have personal Twitter or Facebook accounts to post a disclaimer in their “about me” section saying something along the lines of, “I work for X Company, but all posts reflect my personal views only.” This can potentially protect both the employee and employer should a lawsuit arise, but it is not a failsafe.

The rise of social media is bringing significant benefits to businesses, but they also need to be aware of potential legal pitfalls. As the laws regulating social media continue to develop, smart business owners and managers should be prepared to implement appropriate safeguards and policies to ensure that their business can sustain a 140 character mishap, should one occur.

To protect themselves from any potential lawsuits, companies should have adequate insurance coverage in place to address social media activities. Since most commercial general liability policies do not cover online content, it’s important to truly understand what activities your policy covers.

 

Strength in Numbers: Internet Risk Detection and Brand Protection

Many of the attacks launched against today’s brands are as covert as they are debilitating. In today’s connected age, savvy cyber criminals often blitz companies with a flurry of activity across an array of online channels.

To make matters worse, employees who are using the Internet casually or personally create a vulnerability for businesses: workers could click on a phishing link sent to their personal account and unknowingly be exploited by cyber criminals, or they could bring harm to the business via a social media post they thought to be harmless.

And, let’s not forget that brands can also inflict damage on themselves, such as through executive scandals, accounting errors or failing to protect customers and investors.

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Even though these events may not involve a malevolent, third-party attacker, the resulting fallout can be just as severe as if they fell prey to one.

Given these circumstances, companies could face a barrage of both external and internal threats to their brand, customer loyalty and bottom line.

So, how can they defend themselves? The same crisis management procedures brands use following an external attack should also extend to self-inflicted events. Every reliable, robust brand defense strategy should begin with an Internet Reputation Management Council (IRMC).

The Power of Many

No one stakeholder within a company can be solely responsible for online brand reputation management. Instead, businesses need to bridge the gap between departments, creating an environment in which employees across the marketing, security/IT, finance and legal departments unite and share resources to defend the brand—and it all begins with an IRMC.

Council members representing departments throughout the organization will become Internet reputation champions who work collaboratively, from within their individual departments, to ensure that ownership and management of the brand is carried out across the enterprise.

As such, an IRMC has the range and visibility to combat the multitude of Internet-based threats. To borrow a term from the military, an enterprise that deploys an IRMC is essentially following a “defense-in-depth” strategy, by creating a redundant, layered web of defenders.

The Members of an IRMC

Once a company decides to launch a cross-departmental IRMC, who makes up its members? Executive-level sponsorship will provide the vision for an Internet reputation strategy, facilitate cross-functional and resource collaboration, and build a brand-aware organizational culture. A team leader is responsible for executing that vision on a day-to-day basis and marshaling the resources needed to protect the brand. Area leaders will protect the brand from various departments within a business, including marketing, legal, investor relations, compliance, e-business, human resources, public relations, security and fraud, and IT.

Although all IRMC roles are important, it’s these area leaders who can make or break a brand’s Internet reputation.

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A successful response demands the full participation of every member of an IRMC. Even though response actions may be centered in one department, these crises are full-company situations.

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After all, it’s not as though the public would only render judgment in isolation, for example, against “Target’s security team” or “Yahoo’s executive search committee”—the entire brand is put under a microscope following an incident.

A Defender at Every Position

With an effective IRMC, companies like these can use the “power of many” to combat such Internet-based threats to their brand, even when they’re self-inflicted. An IRMC operates by:

  • Identifying key internal stakeholders and inviting them to collaboratively establish the guidelines of Internet reputation management within the company
  • Meeting regularly to keep abreast of industry and technology changes, as well as emerging forms of Internet-based threats
  • Establishing goals and targets, such as building a structure to set up a “Best of Breed Governance Policy,” and setting metrics to track performance
  • Preparing emergency response protocols
  • Implementing training policies and communication within each department
  • Reviewing, measuring, evaluating and managing progress against objectives

Although a fairly new concept, there are already real-world examples of effective IRMCs. AstraZeneca’s reputation council, for example, comprises a diverse group of those with “stakeholder responsibilities,” including representatives from sales, marketing, finance, human resources and communications. It reports directly to the CEO, and because of this structure, long-term risk management and prevention are infused into the company’s corporate focus.

Ultimately, the true value of an IRMC like AstraZeneca’s isn’t in how many attacks it directly neutralizes, but that it creates an organizational culture of Internet reputation management excellence, starting with the heads of core departments and working its way throughout the rest of the enterprise.

By the time the IRMC is engaged responding to an incident, significant damage has already occurred. The best-protected brands are those that have identified brand protection as a central part of their mission statements. Their investment in a culture of excellence, led by their IMRC, mitigates risks before they become reality, improves profits and creates value for customers, employees and other stakeholders.

A Turbulent Year for the Aviation Industry, Despite Improving Safety

MH 17 Wreckage Denis Kornilov / Shutterstock.com

First, Malaysia Airlines flight MH370 mysteriously disappeared in March, dominating the news cycle and baffling aviation experts, government officials and civilian observers alike. This month, three tragedies in short succession have kept the industry in the hot seat. Malaysia Airlines made headlines once again on July 17 after Flight MH 17, a Boeing 777 flying from Amsterdam to Kuala Lumpur, was shot down over Ukraine. It is now the seventh most deadly aviation crash in history. Exactly who fired on the plane remains unclear, as do many questions of insurance, as war has not officially been declared, despite months of fighting in the region. An act of war would exclude losses from insurance coverage, but remaining uncertainty does as well. Plus, “Unless Russia has declared war on Malaysia, that would knock out the exclusion,” RIMS Vice President Rick Roberts told Mashable. But for it to fall under under terrorism coverage, “someone has to certify that the act that occurred wasn’t a mistake—that it was a malicious act.” The already struggling company may not be able to survive this second disaster, or the reputational devastation.

Ten Deadliest Plane Crashes

Tragedy has further plagued the industry this month. On July 23, a TransAsia flight from Taiwan crashed, killing 48. The next day, an Air Algérie flight from Burkina Faso to Algeria disappeared less than an hour after takeoff in the air space over Mali. Approximately 24 hours later, peasants found the plane’s wreckage near Gao, Mali, and French soldiers dispatched to the scene were able to recover a black box, but no survivors.

Despite the string of disasters, there is no evidence that air travel is in any way more dangerous on the whole. In fact, it is safer than ever before. Nearly three billion people fly safely each year on more than 37 million flights, the International Air Transport Association (IATA) reports, and the global plane accident rate fell to the lowest level in aviation history in 2012. Over the past 10 years, both the crash and fatality rates have trended downward, according to statistics from the Bureau of Aircraft Accidents Archives. But, little more than halfway into 2014, the number of people killed in plane crashes is more than double the total for 2013 (991 and 459, respectively).

Based on BAAA data:

Crashes per year

Deaths per year

Looking back even further, this chart from the Wall Street Journal leaves little doubt that the aviation industry has grown drastically safer:

Deadly flights

While 2014 has been more fatal thus far, the overall number of crashes continues to decrease. There have been 70 commercial-plane crashes globally so far, versus 81 for the comparable period a year earlier, according to Aviation Safety Network, part of the Flight Safety Foundation. Further, the four tragedies do not have any common root causes for their failures.

Insurance Changes on the Horizon

International carriers are feeling most of the strain, and that is likely to have serious implications for insurance premiums. “Given the accumulation of losses, including the loss of Asiana Airlines’ Boeing 777 in San Francisco last year, an explosion causing damage to 20 aircraft in Tripoli recently, and this week’s losses in Africa and Taiwan, these will, altogether, put pressure on the global insurance market,” said Robert Hartwig, president of the Insurance Information Institute. “I expect most of the impact to be focused on international carriers, particularly those operating in or traversing parts of the world that I would characterize as ‘hotspots,’ currently experiencing military or political instability. That would certainly include Ukraine, parts of the Middle East, and parts of Africa.”

While the recent spate of tragedies may leave many travelers wary of getting on a plane, American airlines have less to worry about regarding premiums than their foreign counterparts. There have been are no notable losses this year among domestic carriers, or U.S.-based airlines that fly internationally. As Hartwig pointed out, however, “With a few exceptions, they do not tend to traverse many of those hotspots to begin with.”

In Africa and other developing regions, “you identify accidents in many places that would have happened 30 or 40 years ago in the West, because oversight is lagging,” Dominique Fouda, spokesman for the European Aviation Safety Agency, told the Wall Street Journal. “You also see different accidents linked to local conditions.”

Financial Services Firms Report Losing 27% of Revenue Due to Poor Reputation

Improving reputation remains a chief objective in the financial services industry — and rightfully so, according to a new study that reports firms saw an average of 27% of revenue lost in the past two years due to reputation and customer service issues stemming from the financial crisis.

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The 2014 Makovsky Wall Street Reputation Study found that 81% of financial service firms are still feeling major negative impacts on stakeholder perception, and over three-quarters of financial services executives say industry risk is the same or worse than in 2007.

Public perception, riskier markets, and regulatory actions are the biggest impediments to industry recovery, executives told the communications firm. The biggest drags on reputation come from negative public perception (64%) and regulatory actions (55%), they said. A majority agreed that the top emerging reputation risks are high frequency trading and cyber data breach.

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Further, four out of ten executives say their company’s reputation has already suffered due to recent cyber data breaches.

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Makovsky Wall Street Reputation Study