Over the past few years, social media has evolved into an essential component of the marketing toolbox.
But, most companies have failed to keep pace with the necessary compliance and risk policies and procedures.
A recent study conducted by Grant Thornton LLP and Financial Executives Research Foundation illustrates the problem. The survey responses from 141 senior financial executives from public and private companies showed that:
More than half (53 percent) of those polled see the corporate use of social media increasing significantly over the next 12 months, and almost half (48 percent) feel that social media will be an important component of their future corporate marketing efforts.
However, more than three-quarters (76 percent) of respondent companies do not have a clearly defined social media policy, and more than half (61 percent) do not have an incident management plan to help them deal with instances of fraud or privacy breaches.
As the report points out, social media is the proverbial "double-edged sword." On the one hand, it offers tremendous opportunity to engage with prospects and customers. On the other hand, social networking can also pose a significant threat to compliance, privacy and reputation.
Do the benefits outweigh these risks? They can, provided your company establishes policies to specifically address social media governance and risk management.
"The speed with which social media has grown in the last five years caught many executives by surprise," said Grant Thornton Business Advisory Services Managing Director Jan Hertzberg. "Social media is here to stay. Far-sighted companies that establish ground rules for using social media, monitor compliance and implement governance structures to support its adoption and integration will reap benefits over the long-term."
The full report, Social media and Its Associated Risks, is available here.