Are you prepared to engage customers on Facebook?

The time has come where all Facebook walls are now opened.

Facebook is flexing its social media muscles in the face of the mighty pharmaceutical industry. As of last week, most drug companies have been forced to leave their Facebook walls opened for public comment in an effort to promote ‘authentic dialogues’, says the popular social networking site.

Prior to that, pharmaceutical companies enjoyed the exclusive privilege of being able to monitor and censor comments on their Facebook pages.

The Washington Post reports that Johnson & Johnson has closed two of its Facebook pages and AstraZenaca has deleted or plans to delete its pages as well.  One of AstraZenaca’s sites, ‘Take on Depression,’ was closed Friday after receiving more than 1,100 likes.

‘The regulatory environment and changes in Facebook functionality are creating a much more difficult environment for managing these kinds of pages,’ Bill Price, a Johnson & Johnson spokesman, told the Washington Post.
The truth is, an open Facebook page in this highly controlled and regulated industry carries some risks, but there is no need to shut down or delete a page, once you have a clear compliance program in place.

shepperd‘Penny wise and pound foolish,’ says Michelle Sherman, special counsel at Sheppard Mullin Richter & Hampton, a nationwide law firm. She contends that companies that shut down their Facebook pages ‘are not having their social media business practices reviewed by knowledgeable legal counsel…Companies need to update their compliance programs to reflect legal issues that will determine the litigation outcomes for a firm.’

Sherman, who practices business litigation and consults with businesses on legal and regulatory compliance issues relating to social media and the Internet, adds that if a corporate secretary fails to update a company’s compliance program to address legal issues that can arise from open walls like Facebook, negative results will follow.

‘The corporate secretary can possibly be viewed as not ensuring that the company is meeting the standards for an effective compliance and ethics program under the Federal Sentencing Guidelines,’ Sherman says.

Instead of shying away from the open walls and other social media sites, Sherman advises that corporate secretaries should address the following points to help the overall success of a compliance program:

(i) Train employees: Employees should be instructed that information disseminated through social media might reflect a lack of professionalism or unethical behavior. Remember, the privacy settings of social media do not translate into a privilege in litigation.

(ii) Update your e-discovery policies and procedures and ensure that you include social media and cloud computing activities. Social media should be monitored through the company’s computers and even employee smartphones because there are legal obligations to retain this material as part of a document retention policy.

(iii) Revise or update your Sarbanes-Oxley Act compliance program to ensure that financial information posted on your Facebook and Twitter page - and soon on Google + as well - are updated to reflect material changes in financial condition and operations.

(iv) Recognize that you cannot prevent employees from discussing protected activities on social media sites, but you can emphasize the importance of reporting inappropriate behavior through established internal procedures.

(v) Take reasonable measures to protect your trade secrets and data online subject to limited rights under your government contracts by updating your confidentiality agreements and computer use policies with employees. Clearly communicate the company’s trade secrets and limited rights information and the ways in which use of them is restricted. Also, all company announcements should be done via a press release and not on the social media platform.

By updating your compliance program to reflect some social media safeguards, there should be no need for companies to stop engaging with their customers via Facebook.        

2 comments

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  1. Douglas Chia
    Douglas Chia|

    For more background, see "Johnson & Johnson – A View on the Facebook Policy Change" at http://jnjbtw.com/2011/08/j...

  2. Douglas Chia
    Douglas Chia|

    The statement "The corporate secretary can possibly be viewed as not ensuring that the company is meeting the standards for an effective compliance and ethics program under the Federal Sentencing Guidelines" taken at face value indicates that person quoted does not fully understand the role of the corporate secretary at a public company. Furthermore, making decisions to shut down certain social media sites due to shifting risks and having good compliance and training programs that address social media are not mutually exclusive.

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