“Your business is operating in a digital revolution, use your peacetime wisely” with this statement Richard S. Levick, Esq., President & Chief Executive Officer, Levick kicked off our panel on “Everything Directors Need to Know About Social Media” at the 2012 NACD Board Leadership Conference.
Speaking to a packed audience my curiosity was: who in the audience will leave seeing social media as a strategic business advantage? Will they take action and get social media on their next boardroom agenda?
As we began our session, I asked Allan Grafman, CEO, All Media Ventures and Chairman, Majesco Entertainment to help us better understand boardroom thinking, “What’s the biggest misconception that many directors have about social media as it relates to their business?”
He said, “They think it is being handled. Nothing could be further from the truth. It is an iceberg…and larger than you think” which gave the audience one of the many opportunities to sit up in their chairs. Allan gave us a couple of takeaways right up front:
- Don’t let social media get put in a functional silo: it touches and impacts every part of your business.
- In the boardroom, it is too large for any single committee…this is a topic that needs the entire Board’s attention.
- Don’t believe social will go away, make a list of questions and begin the conversation with your Board and Management team.
It was time to tap into insights from Neil S. Braun, Dean of Pace University’s Lubin School of Business in New York. He has previously been President of the NBC Television Network, Chairman and CEO of Viacom Entertainment, Braun serves on the board of directors, audit, compensation and governance committees of IMAX Corporation.
Asked about how to connect with students, he shared that email is becoming passé. If you want to get your message to his students it requires texting. They are using their mobile phones as ways to stay connected in their world. This is consistent with a global trend on mobile devices.
Social media is part of a larger technology revolution where social connects to mobile, cloud and big data. It is becoming a foundation for business transformation and innovation. It is also a new form of radical transparency into your boardrooms where fans, critics and disruptors are questioning the “art of director decision making.”
At the end of 2011 there were six billion cell phone subscriptions globally, which means that 86% of the people on the face of the earth can now connect and talk or text directly with each other. By comparison there are only 2.3 billion internet users. More people in India now have mobile phones, than have indoor plumbing.
As directors your role is to support your CEOs in exploring how they can socialize and humanize the company as a place to buy, work and invest. It is important to remember that these social conversations have just begun with your customers, employees and investors. With or without you they are talking about your brand with each other. The challenge for the business is to accept that you do not control the conversation anymore.
This opens your business up to a variety of emerging risks which were defined in a recent study by Stanford University’s Rock Center for Corporate Governance, in conjunction with The Conference Board, where they surveyed CEOs, senior executives, and corporate directors. The study could be summed up as: Lots of Knowledge, Little Action!
• Possible loss of control of product branding.
• Possible loss of control of corporate reputation.
• Possible loss of control of proprietary information.
• Potential for misinformation in the market. Information shared among social media users is not verified.
• Potential for misinformation for corporate decision makers. Users of social media represent only a subsample of stakeholders, and their actions and opinions might not be reflective of stakeholders in general or even core stakeholders.
“The majority of those we surveyed don’t have social media guidelines in place at their companies, haven’t had a social media expert consult with their company, and don’t have systems in place for gathering key information. They are putting themselves at serious risk by not taking action,” Professor Larcker concludes.
As you are putting your thoughts together about how to tackle social media as a strategic agenda item for your boardroom, take the next step by asking a specific question that Richard Levick shared to kick start your crisis communication planning which needs to include social channels:
Get confirmation from your CEO that your company knows and owns all of the risk terms and URLs that stakeholders will be keying into Google to access information on your next crisis?
The last thing you want in crisis is for a Google search for “Your Company” and “Problem X” to rank messages belonging to plaintiffs’ firms, activists, or regulators ahead of your own. Once you have identified your risk keywords (i.e. “FCPA investigation,” “shareholder suit,” etc.), buy those terms and related URLs so that no one else can use them directly.
In today’s fast moving news cycle remember by the time you’ve sat down to read the WSJ it will be a history lesson from yesterday’s news. You’ve made it this far so take the next step and get social media on your next boardroom agenda. Your future will continue to be shaped by social media and is ignored at your business peril.
So in an hour we were able to touch on some things directors need to know about social media. Happy we were able to get the conversation started on how directors can ask good questions on social media’s business risks and opportunities in 2012 and beyond.
At Risk for Good we’re here to equip your board to ask smart, strategic questions on social media engagement. Put social media on your next board agenda. Time is now to get connected to customers, employees and investors in the digital revolution.