I might be stepping into a pile of clichés, but the first thing the legal minds see, when social media is concerned, is risks. And please don’t be offended when I say: that is their job.
There are little regulations concerning social media as such but it does raise questions in the areas of e.g. personal data protection, employee loyalty and unfair business practices. But what are the potential benefits of social media? Legally speaking. Here are some thoughts about how social media can help or at least support companies to proactively fulfill legal and regulatory requirements and principles.
Active communication on social media can support requirements concerning disclosure and corporate governance.
The Securities Market Act, Finnish Corporate Governance Code and Rules of Nasdaq OMX set out certain transparency frameworks that publicly listed companies are to follow, and that most bigger unlisted companies aim to follow. Social media can – along with traditional homepage and press release publishing - be used to explain eg governance in the company, major R&D breakthroughs or large deals. A CEO explaining reasoning and shareholder benefits behind a company restructuring on a short video gives the shareholder or potential investor a sense of personal connection to the company and the people up in the corporate ladder.
Businesses see social media as a threat in terms of corporate social responsibility (“CSR”), since it can easily be used against them to spread critical material of wrongdoings very very rapidly to wider masses. It’s true, especially ominous news have a tendency to spread like fire. However, the only way to tackle that is to be proactively open. If something is bound to come out, it might be wiser to admit it openly before the material hits the fan. Social media can be an informal channel to take the cat out of the bag and control the damage with own undistorted truth.
Also, if there is something your company is doing beyond right, then shout it out. Be the one that publicly sets the higher bar in your industry. If your business takes extra efforts to protect the squirrels on the block, maximizes work safety, fights for human rights or engages in some other good thing for the society then share it!
Image: The valuation of companies is increasingly built on social responsibility and other intangible factors.
Social media channels can help enhance consumer protection
For instance, Facebook and Twitter can be agile, real-time platforms where consumers can write questions, make complaints or ask for help in a more personal manner. Interaction online is a good way to show your customers that you care.
Furthermore, meeting requirements in the area of environmental laws, tax laws and the like can be facilitated by open communication with stakeholders, power players and officials. Cooperation and interaction usually beats confrontation.
Here’s a few examples of what social media and digital content can do to polish a company’s profile as a responsible legal subject in the society. The key is to be more transparent, step down from the remote “corporation” pedestal and do things better than the competitors. At the end of the day, the more frank and open a company is, the less its internal and external stakeholders have to question.