"High risks in social media" - opinion piece by Matthew Swinn in today's AFR

Given the number of high profile social media embarrassments, it is remarkable that so many Australian businesses are still grappling with the challenges raised by employees who are Facebook-posters, blog-writers and tweeters.

It has taken an alarmingly long time for companies to realise that staff social media activity has the potential to sheet home to the employer - whether as embarrassment, with the related reputational damage or, worse, as liability for defamation or misleading conduct.

Companies should have heeded the early warnings in 2008 when employees of Domino’s Pizza posted a YouTube video showing the unhygienic treatment of food served to customers. Likewise, later that year, Virgin Atlantic very publicly sacked thirteen cabin crew who had posted criticisms of the company and its passengers on Facebook.

In 2009 and 2010, Telstra had to deal with the embarrassment caused by the “Fake Stephen Conroy” Twitter account of one of its employees and ANZ had to pull debt collection staff into line after they set up a fake Facebook account to track missing debtors. Of course, many journalists, politicians and celebrities continue to be caught out by ill-conceived tweets.

Yet most companies are still not adequately addressing the social media risks.

In February this year, Sony, through its online persona, Kevin Butler, accidentally retweeted an encryption key used to hack the company’s Playstation 3 gaming console - a move all the more damaging because Sony is in the midst of a legal stoush to restrain publication of that code by others.

This is just one amongst many social media gaffes by companies who should know better.

In fact, many companies do not have a social media policy at all. Recent research suggests that only a small fraction of companies have a multi-disciplinary approach to the use of social media - at most companies it is just left to the marketing department. This is despite the fact that the overwhelming majority of Internet users are regular users of some sort of social media platform. In this context, the risks of turning a blind eye to social media activity are considerable.

The risk of liability for social media activity was highlighted last month by an action brought by the ACCC in which the Federal Court determined that a trader - Allergy Pathway - was responsible for the misleading statements made about its products by third parties posting to the company’s Facebook wall. The company was found liable for contempt of court.

Even when a company recognises the need for a strategic approach to employee engagement in the social media space, the execution of that strategy can present further problems. Many companies have fallen into the trap of over-complicating their approach to staff social media activity, being too prescriptive, too restrictive or encroaching too far into the personal activities of staff.

A straightforward, common sense approach, consistent with social media norms of transparency, honesty and authenticity, is all that is required.

The ABC has the right idea. It has four clear standards for personal and professional use of social media:

1. Do not mix the professional and the personal in ways likely to bring the ABC into disrepute.

2. Do not undermine your effectiveness at work.

3. Do not imply ABC endorsement of your personal views.

4. Do not disclose confidential information obtained through work.

If employees follow these guidelines, the risk of liability will largely be avoided.

Gone are the days when the head-in-the-sand approach of blocking workplace access to Facebook and Twitter is an adequate response to the threats posed by social media. People will tweet from their mobile phones or at home instead.

Companies that do not have policies and employee training programs to address the risks stemming from social media tools should put a PR firm on retainer and have their lawyers ready for action – it’s only a question of time before someone slips up.

This opinion piece was originally published in The Australian Financial Review (8 April 2011).