Australia: From cyber space with love: Managing social media risks

From cyber space with love: managing social media risks

79% of Australians are active on at least one social media platform, with three out of five users connected every day. (source: Sensis Social Media Report 2017)

This high level of engagement is a boon for marketers, with brands now able to instantly connect with these customers, fuel word of mouth and strengthen loyalty. Nevertheless, the same speed of communication and viral quality of social media platforms can spell trouble if used to propagate fake news and negative reviews, or turn employees' unfiltered comments into trending hashtags. According to a recent survey of business leaders conducted by Norton Rose Fulbright, social media in the age of post-truth is the second most likely trend bound to affect organisational reputations.

Multi-faceted and unpredictable, the social media risk landscape can challenge the most tech-savvy organisations. In our experience advising organisations, key exposures can be grouped into three categories: employee-related risks, IP issues and reputational damage.

Brand ambassadors... or top detractors?

Many companies acknowledge talent as their top asset, and drive internal engagement campaigns aimed at turning employees into brand ambassadors. The effectiveness of these efforts remains hard to quantify, particularly when considering some notable snafus recorded on social media. From referring to a customer as a 'hag' on Facebook (Preece v. JD Wetherspoons Plc. 2011) to the notorious British Waterways Board v. Smith 2015 ('On standby tonight so only going to get half p*****'), various examples prove employees' social media posts can bring about the risk of reputational damage, but also in some cases vicarious liability for the employers involved.

Reaching 100% workplace satisfaction and compliance with social media policy is highly unlikely. However, several measures can help companies mitigate the risk of social media usage amongst their employees:

  • Creation and implementation of a social media policy for employees, including training on induction and during employment. Policies and training should cover:
    • Employers' expectations.
    • Employees' responsibilities when using social media in the workplace.
    • Employees should not hold themselves out as representing the employer on personal pages or in personal communications.
    • Clear definitions of information which can and cannot be disclosed for work purposes and by whom.
  • Amendments to employment contracts to address the use of social media:
    • Post-termination restrictions,
    • Ownership and confidentiality of social media contacts
    • Return of company property
  • Ability to demonstrate a close connection between their social media account, your business and their duties.
  • Promotion of social media account set up and use for the benefit of your business (company email address and company branding).
  • Ensuring employees also add contacts to a central database on your internal system.

An interesting area of emerging risk, in addition to first and third party liability associated with social media statements, is the growing use of AI tools, and in particular of chatbots, in the context of customer service. Risks associated with chatbots include inappropriate use or reliance by the consumer (particularly related to professional liability), defamatory, biased, abusive and / or inappropriate content and responses, regulatory issues and data protection. As the technology advances more companies may choose to build in human intervention triggers to avoid issue escalation and mitigate AI-related risks.

That's our logo! Brand hijacking and misuse

Brand hijacking and misuse are not new issues, and have been at the core of costly litigation for many decades. However, social media adds a layer of complexity to the matter. Brand hijacking has been famously used by environmental activists targeting many companies across a variety of industries.

While common sense applied to marketing strategies is the first step in mitigating backlashes like the one suffered by Waitrose (' I shop at Waitrose because...' campaign turned into a Twitter-fuelled critique of the supermarket chain), a closer collaboration between marketing and legal teams could result in better risk mitigation down the track.

Another important aspect of handling instances of brand hijacking and misuse is incident management. Depending on the severity and the outreach of the event, as well as on their risk appetite and sense of humour, companies can choose to apply different sets of measures ranging from cautions to legal action when deemed necessary. It is important to note that monitoring and detection should be conducted in real time, with speed of response critical to containing an incident and managing consequences.

On risky ground: reputational damage

As our recent report underlines, (senior business leaders in Australia are not only sensitive to reputational risk, but also cognisant of their more significant exposures. Social media in and of itself is not a risk, but it is a two-edged sword allowing brand showcasing and fostering customer relationships but also providing an open platform for live brand-bashing.

This is particularly applicable in crisis management situations. The stress upon internal resources required to manage the crisis is generally compounded by the speed of contagion due to social media. Recent years have seen platforms fuelling social unrest, and providing the perfect medium for activists; the former have also been finger-pointed for swaying elections, and skewing competitive landscapes ( source).

With ethical conduct increasingly emphasized by consumers across the world, social media should be proactively and strategically used by companies who want to build not only closer relationships with their consumers, but also general goodwill related to their activities.

What can businesses do to manage the risks?

Like it or not, social media is here to stay. Luckily, companies and users alike are coming of age. This new trend is extending the ethical responsibilities of platforms when it comes to curating and approving content, as well as broadening users' awareness of social media risks, and of the importance of managing their personal image online.

Organisations can take a proactive stance to social media use through a combination of policy, process and training:

  • Design an effective social media policy, and ask employees to sign it:
    • Give clear examples of what behaviour is and is not acceptable, including inappropriate use of social media outside of work amounting to gross misconduct.
    • Warn that the company will treat all social media posts (even on the employee's personal social media account) as public rather than private
    • Warn against using company name or associated wording
    • Apply policy consistently and without knee jerk reaction
    • Choose platforms wisely
    • Consider whether comment / advertising is socially responsible?
    • Ensure marketing and communications on social media comply with relevant regulations - no misleading statements
    • Educate the business on social media usage and ensure adequate oversights
    • Consider social media engagement with negative comments VS deletion OR silence
    • Address ownership of social media accounts.
  • Educate your employees and executives with mandatory training attendance
  • Alternative means of employees raising issues (e.g. hotline or grievance policy)
  • Warn employees if monitoring the internet
  • Ensure sanctions are 'within the band of reasonable responses' and proportionate

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Frances Drummond
Georgina Hey
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