Renovating Social Media to Avoid Risk

1. The
Corporate
Counselor ®
Volume 24, Number 12 • April 2010
How Companies Are Addressing Social Media Risk
By Melissa Krasnow Company ComplianCe poliCies the possibility of litigation, audit
and soCial media poliCies or investigation, it must take steps
Social media, including Face- According to a recent survey by to preserve all records that may be
book, Twitter, YouTube, etc., is Manpower, 29% of companies in relevant to the matter, including
an evolving and growing means the Americas and 20% of compa- electronically stored information.
of communication. According to nies worldwide have a social me- If information on the social net-
some reports, people have been dia policy. See “Social Networks vs. working site may be relevant, the
spending more time using social Management? Harness the Power company must take appropriate
media sites than e-mail since Feb- of Social Media, Manpower, Janu- steps to preserve it. Accordingly, a
ruary 2009. See “A World of Con- ary 2010. Companies that do not company’s record retention policy
nections,” The Economist, Jan. 28, have social media policies likely and legal hold should be reviewed
2010. For companies, social media are preparing them or at least con- regarding social media and revised
presents both opportunities and sidering them. While there are so- and updated if necessary or ap-
risks. These risks include reputa- cial media policies, other company propriate. Any new social media
tional, brand, legal, regulatory and compliance policies (e.g., codes policy should be drafted to work
security concerns. This article out- of conduct, codes of ethics, confi- together with the record retention
lines some approaches that com- dentiality obligations, privacy poli- policy and legal hold.
panies are taking to manage the cies, intellectual property policies, Social media policies typically
risks, including: 1) reviewing ex- etc.) often cover aspects of social are tailored to a particular compa-
isting company compliance poli- media use. The starting point is ny’s circumstances, including the
cies and preparing social media for a company to review existing many different ways that compa-
policies as warranted; 2) restrict- policies, determine whether they nies use social media. Many social
ing workplace access to social me- cover aspects of social media and media policies are not publicly
dia; 3) utilizing social media moni- revise or update them as necessary available. Based on a review of
toring tools; 4) taking into account or appropriate and prepare a so- the social media policies of Sun
actual social media business is- cial media policy as warranted. A (which was acquired by Oracle
sues; and 5) reviewing insurance new social media policy should be in early 2010), Yahoo, IBM, Edel-
coverage. drafted to be consistent and inte- man, Cisco and Dell, following are
grated with other company compli- some of the common elements of
Melissa J. Krasnow is a partner ance policies. these policies:
in the Minneapolis office of Dors- By way of example, a company • Identify yourself and make
ey & Whitney LLP whose practice record retention policy and legal it clear when you are speak-
focuses on privacy, social media, hold could be implicated by so- ing on behalf of or about the
corporate and securities law. For cial media use. Information on a company;
additional information please visit company’s social networking site • Use common sense and judg-
www.dorsey.com/krasnow_melis- is considered to be electronically ment;
sa/. She may be reached at kras- stored information. As soon as a • Know that there is personally
now.melissa@dorsey.com. company is reasonably aware of liability for content;

2. LJN’s The Corporate Counselor April 2010
• Understand that disclaimers cess solely for business purposes, postor sites and how to shut them
are advisable, but not a shield
16% permit limited personal use down).
from liability; and 10% permit any personal use Reviewing Insurance Coverage
• Realize that disclosed infor-of social networks. See “Whistle A company should review the
mation should be accurate; — But Don’t Tweet — While You particular terms of its existing in-
• Seek advice from the legal Work,” Robert Half, October 2009. surance coverage and determine
department or management Social Media Monitoring Tools whether any social media use or
when necessary (e.g., when Social media monitoring tools aspects are covered.
unsure about posting or for encompass analytics software for
permission to comment on tracking and analysis (e.g., traffic, ConClusion
work-related legal matters);keywords, trends, etc.), including Addressing the risks of social me-
• Do not disclose confidential Web software tools like Webtrends, dia should not necessarily outweigh
or financial information or Omniture and Google Analytics. In realizing the opportunities. Compa-
material, non-public informa-
addition, there are URL shorteners, nies also must recognize and en-
tion about the company; and including Bit.ly and Ow.ly, which courage the opportunities offered
• Follow established compa- track information like clicks from by social media for communication,
ny guidelines, policies and different traffic sources. There also relationship-building and reputation
codes. are tools that collect metrics on and brand enhancement, among
Social media policies often in- Twitter — Twittersearch, Twitrratr, other things.
volve different areas of a companyTwinfluence and Tweetstats. Com-
(e.g., human resources, market- pany employees could engage in
ing, legal, communications, etc.).monitoring on behalf of the com-
A number of different laws could pany. Moreover, there are third-
potentially apply, including with-party paid monitoring options,
out limitation employment, intel- which can be domestic or global
lectual property, privacy and se- in scope. These include Radian6
curities law. In some cases, there(owned by Webtrends), Sysomos
may be additional regulation (e.g.,
and Buzzlogic. These tools track
Federal Trade Commission, Finan- the activity of a brand in social
cial Industry Regulatory Authori- media and provide insights about
ty, Food and Drug Administration, the tone of the dialogue (i.e., “sen-
etc.). As a result, a multi-disciplin-
timent analysis”).
ary business and legal team fre- Considering Actual Social
quently is assembled to prepare a Media Business Issues
social media policy. As with other Certain business issues are aris-
company compliance policies, a ing through the use of social me-
social media policy needs to be dia. Examples of these include an
implemented and enforced con- impostor establishing an impostor
sistently. site, pretending to be another per-
son (e.g., Twitter impostors in the
RestRiCting WoRkplaCe case of celebrities and executives)
aCCess to soCial media and whether Facebook’s terms of
According to a survey by Rob- use can be modified. Once aware
ert Half, 54% of U.S. workplaces of these issues, a company can Reprinted with permission from the April 2010 edition of the
LAw JouRNAL NewsLetteRs. © 2010 ALM Media Proper-
completely block access to social work to devise protections and ties, LLC. All rights reserved. Further duplication without per-
mission is prohibited. For information, contact 877.257.3382 or
networks, whereas 19% permit ac- solutions (e.g., how to deter im- reprints@alm.com. #055081-03-10-06