Social Media: Risk Management

The Social Media Era has brought with it new risks for employers, in terms of privacy, confidentiality and employee loyalty. These and many other related issues were the subject of a seminar, “Channeling the Workplace Social Media Explosion: Opportunities and Risk for Employers,” co-sponsored by Makovsky and Littler, a leading global employee and labor law firm, on July 18. Attentive listeners included HR and Communications Directors and General Counsels.


Overall, business leaders are confronted with the ongoing struggle between reaping the advantages of social technologies (e.g., improved marketing and business performance) and the potential risk associated with conversations involving confidential or ethically inappropriate material, according to Andrew Goldberg, EVP and head of Makovsky’s Organizational Communications Practice, who was one of the leaders of the program, along with Phil Berkowitz and Barbara Hoey of Littler.

“The beauty of social media is that it encourages spontaneous communication that involves easy sharing of images and messages with friends and peers. This makes for a very rapid, creative dialogue within the business setting and with customers and stakeholders.

“Yet spontaneity holds many risks,” Goldberg said. “This is because, in the immediacy of the dialogue, it is very easy to blur the line between one’s business and personal boundaries. It’s also easy to forget the distinction between one’s personal ideas and the intellectual content of one’s company.”

This can lead to loyalty problems.

“First, users often are in denial about the actual openness of their conversations outside their immediate social network. They have a high expectation of privacy, which is not always correct. If they are communicating over a company-owned computer or mobile device, for example, many legal experts argue these communications are not protected.

“Inadvertent leakage of company information is also a risk,” Goldberg warned. “It is often a heady experience to share an insight with a colleague outside the firm, or to be the first out with an original idea. Yet many employers take a pretty narrow view of what can be shared outside the firm.”

Finally, there are clearly potential material adverse consequences to sharing information, which may be mistaken or somehow misleading, he remarked. This is especially true in health care, where patients’ lives are at risk.

Goldberg concluded that social media use will only accelerate. There are too many benefits for companies and consumers. He stressed that corporate leadership needs much more refined and flexible risk management policies that avoid stifling creative exchanges, while still making employees mindful of appropriate ground rules for social communication.