Tips to help technophobe executives navigate the sometimes bewildering world of social media
Our college graduates can’t write!’ is the kind of provocative statement that Bruce Nolop, chairman of Marsh & McLennan’s audit committee and former CFO of Pitney Bowes and E*Trade, makes now that he’s a regular blogger for WSJ.com.
‘The internet is the new Wild West,’ Nolop explains, noting that statements that throw down a gauntlet are the ones that typically go viral. Understanding a medium where ad hominem attacks are commonplace is therefore important, he argues, because knowing when not to respond to provocation is critical for board directors and other corporate strategists.
Nolop knowledgeably debates the merits of Twitter versus LinkedIn, but he’s a rare breed in boardrooms today. Given the average age of directors (most of whom are in their 60s) and the fact that many are retired, it’s no wonder some can’t tell a tweet from a hashtag.
Lucy Fato, newly appointed general counsel at McGraw Hill Financial, believes boards have no choice but to wade into the social media arena. ‘Directors are very aware that social media is a growing and important area, and one where you have to get involved at some level,’ she says. ‘It’s not just you talking about yourself on social media. Other people could be talking about you, and you need to monitor that and respond to it.’
Claudia Allen, partner at Katten Muchin Rosenman and
co-chair of the company’s corporate governance practice, believes that educating directors about social media requires focus. ‘The corporate secretary should explain how social media is used at the
corporation in two primary areas: creating a company’s brand and communicating information to investors,’ she explains.
Understanding social media is imperative for directors as
they review various corporate
policies. One obvious example is investigating whether disclosures on social media meet the latest Regulation Fair Disclosure
compliance standards.
Less obvious but no less crucial is what social media means for, say, a whistleblower policy. ‘Social media gives another avenue for whistleblowers to air their issues,’ says Nolop. He explains that companies need to continuously reinforce the idea that employees can raise issues anonymously and without fear of retaliation: ‘It’s much better when the company is the avenue through which an employee or customer raises an issue than if he or she goes to the internet.’
Here we present a social media cheat sheet for the director who’s never ‘liked’ a post on Facebook but wants to master the learning curve – fast.
|
With nearly 1.2 billion users, Facebook has earned its reputation as the granddaddy of all social media channels. Fato finds Facebook is the one channel many directors have personal experience of using simply because ‘older generations tend to keep track of their grandchildren this way. The Facebook phenomenon has crossed generations more than Twitter and the other social media outlets. Consequently, Facebook can serve as a ‘gateway drug’ for a director as he or she crosses the digital divide. Jim Brashear, general counsel and corporate secretary at email encryption company Zix, recommends ‘friending’ industry experts and then using Facebook as a newsfeed. He contributes to Facebook and Twitter less to spark a conversation than to serve as ‘a resource for people interested in data security and data privacy.’ |
BLOGSWeb diaries written by everyone from home cooks to CEOs, blogs – short for weblogs – are an invaluable source of news and insight. Although hardly any directors blog (the word can also be used as a verb to describe the act of writing a blog, or blogging), Fato is delighted Nolop is doing so. ‘We think it’s great that we have directors keeping up with what’s going on in the world and writing about it,’ she says. '[Nolop] speaks a lot on the topic of risk management, so he’s very aware of the pitfalls. That said, people need to understand that everything you say in a blog is on the record and open to scrutiny. You need to be really cautious.’ |
|
Brashear, who is active on Twitter and currently has 1,400 followers, is a great fan of the medium. Famed for its celebration of brevity thanks to its 140-character limit per message, or tweet, Twitter is a communications vehicle worth understanding because ‘it’s a rich source of incredibly timely information,’ says Brashear. Darrell Heaps, CEO at Q4 Web Systems in Toronto, agrees: ‘Twitter is where news breaks and sentiment is determined.’ He urges directors to make sure the firms they serve have a process in place to alert them to any relevant trends or news emerging on Twitter. Within the past year Twitter and other social media outlets have become excellent early
warning systems for activist interest in a stock. Carl Icahn drove this point home when he began tweeting to his 169,000 followers first about a takeover bid for Dell and later about his multi-
billion-dollar stake in Apple. Brashear also emphasizes that ‘the value of Twitter is who you follow as much as who follows you’, and therefore urges corporate secretaries and directors to ‘follow people who tweet more about substance and less about what they had for breakfast.’ |
|
For many directors, LinkedIn, which functions as an online resumé for businesspeople, is one of the easiest social media channels to understand. Job hunters use LinkedIn, and so do companies recruiting new talent. For directors and corporate secretaries, LinkedIn may be particularly valuable because of the various professional forums for swapping ideas that it offers. For directors and corporate secretaries, Brashear recommends the Corporate Governance Leaders, Boards & Advisors, and Corporate Secretary and Governance Professionals groups. |
HASHTAGSA hashtag is a word or phrase marked with a hash (#) sign that helps group similar messages together. By tagging a phrase with the hash character, a company or user can increase the odds the message will be seen by interested parties on Twitter, Facebook, Google+ or even a photo-sharing site like Instagram. Directors might use the hashtag #corpgov to locate relevant news items. ‘Part of the utility of the hashtag is gaining an introduction to people who regularly post on topics of interest,’ says Brashear. |
HOOTSUITE AND TWEETDECKThese tools allow communicators to post the same information to multiple social media platforms at the same time. |
YOUTUBEMore than 6 billion hours of video are watched each month on YouTube, a video-sharing site. Because websites and videos are fertile ground for hoaxes, directors need to be familiar with YouTube so they can help the company act decisively should a crisis arise. ‘Companies have to change their response mechanisms,’ says Nolop. ‘With social media, it’s not just what you say, it’s also the speed with which you respond.’ |
SOCIAL MEDIA MONITORING SYSTEMSGiven the incredible noise within the social media space, many companies are purchasing monitoring systems from business wires and technology firms to help track trends in sentiment, as well as mentions of a particular company. Heaps points out that boards need to learn very swiftly when an issue escalates on social media – and they should inquire whether there’s a mechanism in place for corporate communications to alert the full board about these developments. |
PINTEREST, INSTAGRAM, SNAPCHAT AND VINEOne reason why understanding social media outlets is such a daunting prospect is that oddly named channels are proliferating at such a staggering pace. Fortunately, says Brashear, Pinterest – a social networking site for posting and sharing images or project ideas – and Vine – an app launched by Twitter for displaying short, looping videos – may be great fun to explore but they’re certainly not must-haves for directors in their professional capacities. |
