Social Media And The Corporate Governance Professional

The recent collapse of autocratic regimes in Egypt and Tunisia – with the possibility of more to come – came about at least in part because of the ‘social media revolution’. The protests, which began in late January, did not kick off with guns or a flurry of terror, but with tweets, texts and videos that were made possible by the popular social networking sites Facebook and Twitter.

According to reports, more than a third of the Arab world uses social media. In Egypt, what began as an anti-Mubarak Facebook page started by a Google engineer ended up igniting a powderkeg of rage among the country’s youth, and this eventually snowballed into a major protest in Tahrir Square.

As the protests intensified, Egypt temporarily cut off all access to the internet, thus stripping the country of its online presence and curtailing the protesters’ ability to communicate with each other and the outside world.

‘If this kind of thing can take down the government in Egypt, it can take down your company,’ says Doug Chia, assistant general counsel and corporate secretary of Johnson & Johnson. ‘You really need to be careful about what you put out there because, chances are, you won’t be able to take it back.’

Concerns like these are what made Eric Jackson, founder of corporate governance-focused investment company Ironfire Capital, initially apprehensive about using social media to get his message across. Instead, he took a back seat and quietly continued to monitor the networking sites. But as time passed and news stories about chief executives stepping down and companies operating under poor leadership started burning up the internet, Jackson decided it was time to make his voice heard.

He started blogging in late 2006. What he thought was a small post about the resignation of Yahoo!’s former CEO garnered a huge positive response. Now Jackson has more than 3,000 followers on Twitter, and he rarely lets an hour go by without updating his status.

‘Today there’s more action and communication going on, and we need to be more engaged,’ Jackson observes. ‘It’s all about staying on top of what’s happening and knowing what to say – and when to say it.’

Despite the fact that both large and small in-house legal departments have been reluctant to engage in internet dialogue, new media have created avenues for governance professionals to flourish as thought leaders and entrepreneurs throughout the industry.

‘It’s all about exchanging ideas and using these discussion forums to learn from each other,’ explains Chia. He is a frequent tweeter and spends most of his time using the online service to gain and share ideas about corporate governance. He claims there are many advantages and, while some participants make valuable contributions, others can simply ‘follow’ and closely monitor the development of trends in the marketplace.

‘Social media present a two-way street,’ Chia explains. ‘You are getting constant feedback about what people like and don’t like.’ He sees Twitter as an opportunity to create dynamic content worth following. ‘What I am trying to experiment with is using social media as a tool for stakeholder engagement beyond consumers, like those who are interested in different aspects of the company – it’s a way of interacting with those groups,’ he points out.

‘I do want to see where this is going, however. A lot of people are worried about regulatory concerns, and I feel like I need to be there to understand how these different tools work.’

A slippery slope?

As communications tools with almost uncontrollable power, social media outlets can wreak havoc as well as drawing people together. As mentioned earlier, the recent social media revolution going on in the Middle East has caused regimes of some 40 and 50 years’ standing to lose stability at their foundation, but it also led the authorities to block sites that showed the world what was going on in their countries as the riots escalated.

Wendi Bickett, assistant corporate secretary at Houston-based natural gas company Enterprise Products, says it might take some time to adjust to this controversial phenomenon. ‘During the 18 years I have been a corporate secretary, we have not had instant communication – to me, it’s still new,’ she admits. ‘Facebook and Twitter have changed everything, and we are going to have to keep up with it all.’

Most of Bickett’s experiences come from the oil and gas industry, which, she says, is still very conservative when it comes to social media. ‘It seems to be mostly the retail companies that have entered the social media waters,’ she notes. ‘The non-retail side has not yet embraced these social networks, but at some point we are going to have to move in that direction. Some companies are being proactive about it, but industries like oil and gas are more reactive.’

Still, even in the energy sector, which is notoriously resistant to change, many companies are embracing new social technologies – although concerns are emerging among corporate secretaries at those companies. ‘Privacy – that’s something we need to think about,’ Bickett explains. ‘It’s hard to track what others are saying about your company, and we must be careful what we put out there.’

Online assistance

While Chia understands the implications of taking the online leap of faith, he also feels social networks can only assist the energy industry in making progress. To illustrate his point he cites last year’s BP oil fiasco, which serves as an apt example of the power of the speeding social media bullet. 

Similar to the chaos engulfing Egypt, live video feeds of the spill and constant updates via Twitter and Facebook created a maelstrom of anti-BP commentators and an army of concerned bloggers, which eventually tarnished the company’s reputation.

Last year, BP developed a social media strategy to specifically designed to address the oil spill.  

Returning to the issue of privacy, the truth is that in the age of the Internet, no one stays private for too long. The constant flow of information remains a valid concern, and the potential to misstep – whether networking traditionally or online – will always be present. But what about when you are a company’s general counsel or an executive? Isn’t the use of Twitter and blogs supposed to make your job easier?

‘I think one fear that emerges when you are out there on the internet is making statements related to your company that make you seem like an official spokesperson,’ observes Chia. ‘If a CEO is out there tweeting and making statements about his/her company, then those tweets can be seen as the company’s tweets.  Corporate secretaries worry that this may apply to their own tweets and thus are naturally hesitant. But, there are ways to make a clear separation.’

You fear, you fail

In the digital world, where consumers have a low attention span and news moves at fibre-optic speed, it’s easy to worry that an offhand statement online will permanently ruin a brand – but you mustn’t let this fear keep you from reaping the benefits of social networking. If you do hear or see an eye-catching story about your firm, however, what should you do? If you ignore it, this will be seen by most as a lack of concern and could well serve as a strike against you.

Tracy Stewart, executive director of Shareowner Education Network, a non-profit organisation that lobbies for retail investors, says corporate secretaries should view social networking as a new avenue to get their message out rather than seeing it as ‘evil’.

‘The general counsel should regularly post information online but, at the same time, he or she can’t give out information that is private,’ Stewart explains. ‘If you take news about a company that has already been released and start putting it into context for investors, that adds to the real value.’

On the other hand, she advises that if you write something that is controversial, it is better to ‘let it sit for a couple of hours or ask someone for their input prior to hitting the post button.’ As far as Stewart is concerned, getting involved and establishing an online presence is always important in the job market. ‘Knowing how to understand these websites and respond to them will only enlarge a governance professional’s toolbox, and this will increase the demand for information,’ she explains.

Chia raises a similar point. ‘I have told people, you don’t have to be there broadcasting everything online. You can be there just to observe and use social media as a tool to monitor. There’s a lot being said about your company on this site, some good and some bad,’ he says.

Get involved

The rise of social media has inevitably revolutionised the media landscape, and creating a strategy to tackle the unruly side of new media can help corporate secretaries engage better with the investor community while encouraging overall professional development.

‘Using these tools effectively will lead to better career management, so it’s OK to take the risk and learn from your mistakes,’ assures Jackson. ‘Remember, there is always going to be the new, young lawyer who is deeply engaged in social networking, and one day your boss might ask, Why aren’t you on it?’

No matter what you think of social networking, there’s an online community just a few clicks away where everybody knows your name. It may sound scary but – as the experts suggest – you are still in control.

‘Using Egypt as an example, that country had been under a dictatorship for decades, so who knows when the dominos in corporate America might fall?’ Jackson asks. ‘This is now the opportunity to make a change.’

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