Thoughts and Ideas

8 September 2011
When Social Media Matters: a Guide to the Board of Directors for better Governance

In 2009, the  Deloitte Ethics and Workplace Survey explored attitudes about social networking and pointed out the significance of social media for board of directors.* 58 percent of executives felt that the reputational risk associated with social networking should be a board room issue*. Yet,  only 17 percent of executives said that they currently had programs in place to monitor and mitigate reputational risks that may arise with social network usage. Boards have since largely left it to management to figure out its social media strategy. When informally asked in a boardroom, Competia found that *less than 5% of directors* admit having ever used and participated in social media. Mistrust is widespread and the issue of privacy is of utmost concern. The implications of social media for the board far outreach reputation risk. As the use of social media is rapidly spreading and challenging every single company business model and strategy, it is time for directors to understand the implications for corporate governance.