Social Media. Friend or Foe?



Think email, SMS texting, LinkedIn, Google+, Facebook, Twitter, Pinterest, instant messaging and all the rest of the social media circus; after all, there are a great many to choose from. Don’t forget the associated equipment: desk top computers, work stations, smart phones, tablets, ipads, notebooks & laptops.

To get to the point here, are these social media platforms and electronic communication systems your friend or your foe? The question therefore is social media: friend or foe? You must think about this carefully before you answer, there are implications.

Warning: There is a considerable amount of information here concerning your business relationship with the various social media platforms. This is an area fraught with potential danger. Is social media: friend or foe? I understand how important this information is to you when making up your mind as to who can best help you with the operational management of your business. Consequently, as the guide covers a lot of ground, expect a long read.

A Point to Ponder

Social media gaffes are a fact of life. A public gaffe using email or any other social media, whether intentional or not, whether malicious or not, can unexpectedly trigger a troublesome crisis when you least expect it; and crises of this nature often result in expensive litigation of one sort or another. The litigation can come from two directions. There are the people who take offence at the public gaffe and there are regulatory authorities who may become involved as a consequence of the gaffe. Social Media: friend or foe?

In today’s business world, electronic communications are simply everywhere, they are impossible to ignore

Hello there. I’m very glad you could join me for another thought-provoking discussion on an important subject that is often unseen, generally overlooked or simply ignored by the owners and managers of small and mid-size business enterprises. Take email as an example. Email is now ubiquitous, which is a fancy way of saying that email is simply everywhere, you can’t escape it.

It’s a question of control. When you add the other forms of electronic communications to the mix (instant messaging, SMS, social networking, etc), owners and managers of small and mid-size business enterprises like you have some very basic and sensitive issues to deal with, whether you realise it or not. These basic and sensitive issues directly concern how you manage, or perhaps control would be a better word, your electronic communications.

Identify the problem. Put in context, can I ask if you are directly controlling everything that enters and leaves your computers, tablets, mobile phones and smart phones at any time of the day or night? If you are not effectively controlling everything that enters and leaves your electronic communications equipment no matter what the time of day or night, then I would suggest that you have an exceptionally serious problem.

Social media is here and now. Why have I chosen to raise the question of how you control your electronic communications? The answer is quite simple. The answer is reflected in the following difficult situations that your company could conceivably face at anytime. The question therefore is this: how would you deal with any of the scenarios outlined below if they were unexpectedly referred to you for action. They reflect true-life events and reflect the question: Social Media: friend or foe?

Scenario 1: binding company contractual obligations

The unpaid invoice. A former supplier of materials to your company contacts your accounts receivable clerk to inquire why an invoice dated four months earlier for a substantial amount has not been paid. Your clerk notifies the supplier that their contract was terminated nearly five months ago in accordance with the contractual arrangements that existed at that time between the supplier company and your company. The supplier then replies that the contract was extended by Jimmy Salesman, who placed the order that hasn’t been paid.

Company purchase authorities. Apart from you, Jimmy Salesman is the only employee with the authority to enter or cancel contracts through email communication. Jimmy has a password-protected account with a digitised signature. All staff are aware of Jimmy’s authority and new suppliers are notified of Jimmy’s authority on first contact with your company.

The plot develops. You then contact your counterpart in the supplier company who provides you with a copy of an email received from Jimmy Salesman’s email account four and a half months ago extending the contract for a further six months. You check with Jimmy, who of course, denies personally sending the email. You now have a contractual dispute on your hands, which creates several problems for you to deal with:

  • Who sent the email and why?
  • How was someone able to access Jimmy’s digitised signature and password protected email account and send an email message?
  • How will you ensure that this never happens again?
  • Will you be able to resolve the matter amicably with the supplier?
  • Was it reasonable for the supplier to rely on the email?
  • What internal security and control features could have prevented the situation from happening?

Scenario 2: security of confidential information

Delegation dangers. You’re a very busy manager. In an attempt to limit the amount of time you have to spend dealing with email correspondence, you authorise your PA to deal with many routine matters. You therefore authorise your PA to add your digitised signature to this official email correspondence, and you make sure that the PA understands that the digitised signature must be kept secure.

Uh, oh! All goes well for a time until a disgruntled employee unexpectedly quits. Shortly thereafter, you and your company are charged a substantial amount for luxury and prestige items purchased by the company under the authority of your electronic signature but delivered to an unknown address.

Note that the questions for Scenario 1 are equally relevant here.

Scenario 3: personal use by staff

Staff shenanigans. During her lunch breaks, your employee Ms Investor routinely uses the office computer system to check her share portfolio and make trades. One day, Ms Investor decides to throw caution to the winds and short sell a substantial number of a medical device manufacturer’s shares. She has heard rumours that the company is not doing well and decides to take advantage of this opportunity. She hopes the share price will drop quickly and provide Ms Investor with a significant financial benefit. Unfortunately for Ms Investor and perhaps unknown to her before she initiated the trade, there is another rumour circulating  about a pending government approval for a popular new product about to be launched by the manufacturer. Most shareholders are expecting a share price rise.

Action. In two hours, the manufacturer’s share price rises $6.00 per share, dashing Ms Investor’s hopes of a large windfall profit. Now desperate, Ms Investor takes the market into her own hands. Again using your company’s email system, she sends an ‘anonymous’ (and as it turns out, devastating) posting to a popular stocks and shares forum. Posing as an insider within the manufacturer, Ms Investor claims the government’s pending announcement will be nothing more than a ‘no action’ letter requesting further information from the manufacturer.

Reaction. As Ms Investor’s rumour takes hold, nervous investors start selling off their shares. By the end of a very hectic trading day, the shares have dropped $12 per share on the day’s opening price, reducing the manufacturer’s market capitalisation by millions of dollars. Needless to say, the manufacturer is not happy.

Rearguard action. Determined to unearth the source of the rumour, the manufacturer tracks Ms Investor’s ‘anonymous’ email message not only to your company, but directly to the computer workstation on her desk. The outcome? The manufacturer pursues Ms Investor in the courts for triggering a devastating decline in the company’s share price. Additionally, because your company is presumed to have deeper pockets than Ms Investor, the manufacturer sues your company for damages amounting to a staggering sum for failing to control Ms Investor’s online activities from your computers.

Have a careful think about this. There’s not only big money involved, but substantial adverse effects on your company’s reputation, goodwill and balance sheet.

Scenario 4: trust

Think Gordon Grech. Think Malcolm Turnbull. Emails can be forged. Emails can be faked. An email can be faked in many ways: from who allegedly sent it, to who allegedly received it, to where it allegedly came from, to the date that it was allegedly sent and received. Remember the golden rule: be warned, be alarmed, be afraid but most of all, be prepared!

Control of electronic communications is not an option: it’s essential

This is important. Now, can you see why I am raising the question of why your control of email and other electronic communications is so important? Control of email and other forms of electronic communications therefore is much more than simply preventing employees sending rude jokes, or harassing staff with sexually suggestive messages or pictures or being offensive and discriminatory in other ways.

Beware the scope. Unfortunately, most companies today focus on those obvious forms of email abuse and miss the broader scope of the electronic business risks and the associated legal liability. This legal liability includes the vicarious liability you will wear for the damaging, harmful or injurious actions of your employees, whether or not the actions are intentional or accidental.

Two realities for business owners

Control the risk. There are two realities for you to face here. The first reality is that when you permit your employees to access your electronic communications systems, you put your company’s assets, future and reputation at risk. The second reality is that for your own protection and the protection of your company, you must control this risk. The accidental misuse and intentional abuse of email and other electronic communications by employees can, and too often does, create million dollar headaches for companies. And it is not just inexperienced staff and vengeful employees who are creating electronic liabilities.

Even CEOs make gaffes. How often have you seen newspaper reports of a Chief Executive or other senior company managers, executives or skilled professionals who should know better, making newsworthy gaffes that trigger everything from tumbling share prices to questions in parliament to a media feeding frenzy?

This is where I come in.

Implementation of managerial controls

Manage the risk. I can help you to prepare and implement a system for the management and control of your company’s email and other electronic communications. Your communications systems belong to you. You are the employer with the risk to manage and control. In that regard, the first point to note is that your electronic communications policy must meet the particular requirements of your company. Every company is different, so a policy designed for one company will not, in general, transfer easily into another company. Within that context however, an effective policy for the management and control of your company’s email and other electronic communications will cover the obvious elements:

  • why active enforcement of your electronic communications management and control policy is paramount,
  • risk-minimisation of electronic communications misuse and abuse,
  • control of your employees use of the email system and other electronic communications equipment (and employees’ equipment, where it is used for company business), including enforcement of rules about online etiquette,
  • control of electronic communications privacy,
  • control of electronic communications content,
  • control of employee participation on online forums, social and business networks,
  • control of electronic communications by employees with remote access,
  • management, retention and back-up of your electronic communications records: which records are to be backed-up and for how long,
  • making your electronic communications secure: physical security, content security and network security,
    dealing with spam,
  • the training of staff for effective and safe use of electronic communications technologies

When you implement a comprehensive policy for the management and control of your company’s email and other electronic communications, you will become one of a select few employers who can confidently sleep more comfortably at night because:

  • you will have derailed intentional email abuse and harm,
  • you will have curtailed email misuse and blunders, whether inadvertent or foolish, and
  • you will have limited costly electronic liabilities.

Action time: the next step is up to you

Action time. I am sure that you realise the seriousness of this subject, and can feel the pain suffered when an employee makes a fateful public gaffe, whether intentional or not. Why not call me now on (+61) 0404 631 230 for an ‘off-the-record’, confidential discussion as to how I can help you to prepare and implement an effective policy for the management and control of your company’s email and other electronic communications. Don’t delay calling me. Remember that time is of the essence because you never know when a public gaffe will be made. A public gaffe, whether intentional or not, can quite unexpectedly trigger a difficult and troublesome crisis when you least expect it. This gives some meaning to the question: Social Media: friend or foe?

Please Note This Important Personal Limitation. As a sole-practitioner, I simply cannot always accept every assignment I am offered. There are unfortunately not enough hours in each day to accept them all. So please call me now. For fairness, I have to operate on the ‘first up, best dressed’ principle.

Yours sincerely,

Graham  Segal

Chiron! the business doctor.™ ... relieves business pain!™ 


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© Graham Segal, Author. March 2013. All Rights Reserved

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