Boards remain uneasy about social media, says women’s directors group
While the rest of the world is consuming all things social media, many corporate board members continue to take a wait-and-see approach.
At the third annual WomenCorporateDirectors (WCD) Global Institute held in New York in May, at which boards and technology were discussed, 55 percent of directors in an onsite poll said their boards were ‘not that comfortable’ or ‘very uncomfortable’ with social media.
Boards are uneasy about the use of social media for several reasons, including age, time commitments and perceived value, says Cathy Allen, a director on the boards of Synovus Financial Corp., El Paso Electric Co. and Stewart Information Services.
‘Age -- most directors are in their late 50s, 60s, or older. Time – most directors are not retired or have rigorous time commitments and social media is not that important. And value -- much of what is on social media is not relevant or of value to them. For example, sports, entertainment or social news,” she says.
Furthermore, social media is an unknown to most board members, says Myla Villanueva, CEO of Novare Technologies in the Philippines. ‘They are not yet confident that it is a boon – a new cost effective way of communicating with a new generation of consumers, or a bane – a medium that can at once turn uncontrollable,’ she says.
There may be a gender gap, however, with women directors likely to be more social media savvy than their male counterparts, according to Allen. ‘Women tend to be more attuned to customer service and consumer behavior issues,’ she says. ‘It is often the women board members who bring the issues to the board for discussion.’
But the use of social media to influence proxy voting ‘is a growing trend and potential threat with activist stakeholders,’ she says. ‘Still, most stockholders are institutions, but the fund managers are often younger and use social media.’
Jeanette Horan, chief information officer at IBM, recognizes the merit of social media in the boardroom. ‘Social media message boards can be leveraged as additional means to reach out to independent shareholders,’ she says.
The way to get boards more involved is for them to understand social media’s impact on companies’ customers, both currently and in the future, as well as on customer research and on company employees, says Allen.
The onus is on management to share social media strategies with the board, such as explaining how the company is using social media to advance its business agenda, says Horan. This includes the role that social media increasingly plays in marketing and to elicit and assess customer reactions to new product announcements.
Sitting on the social media sidelines may prove a costly strategy. ‘There is a deep sense that there is also a great risk to non-participation,’ says Villanueva.
Companies increasingly recognize that regardless of their attitudes toward social media, if that’s where their customers are, that’s where they need to be active as well.
Social media can be an effective way to interact with the media to tell a company's story, a view that isn't lost on Allen. ‘Because of declining newsrooms and budgets for research, most journalists first go to social media outlets and websites for information and often do not interview people firsthand. If your firm is not on social media, or not monitoring it, there is a risk of reputation damage, if you do not respond to what is said about your company, as well as the risk of not using social media to your advantage,” she says.
Reporters pay attention to blogs and tweets. If you're not there, says Allen, reporters may take what others say about your company and not ask for your response. ‘You are not framing the story or even participating – not a good place to be. Firms must have both defensive and offensive strategies for social media and boards need to understand how important this is,’ she says.