Directors and executives know that social media is a megaphone, but do they know who in the company is holding the megaphone? And are there guardrails in place? In this week’s D&O notebook, my colleague Lenin Lopez provides timely information on how to implement and update your company’s social media policy. – Priya Huskins
It’s hard to believe that the first tweet was sent more than 15 years ago. Since then, social media platforms have flourished and companies have leveraged their reach to communicate with customers and investors, build brand awareness, drive traffic to their websites and recruit new employees.
Whether you are a private company with 20 employees or a public company with 20,000 employees, a solid social media policy can go a long way. One of the main reasons for implementing a social media policy is to protect against unwanted and preventable accidents related to the use of social media by employees. Not having a comprehensive social media policy can leave employees second guessing what is acceptable. In some cases, employees may not even know how potentially problematic their online behavior is. Unfortunately, social media mishaps can have serious consequences for your company’s reputation, bottom line, share price, and legal exposure.
Catching up with modern times
At first, some companies reacted to the advent of social media by simply including a section dealing with the subject in their codes of conduct or employee handbooks. It didn’t always go well. In an interesting case from those early days, Costco included an electronic communications and technology policy in its 2010 employment contract, which was more like an employee handbook. The policy instructed employees to ensure that they keep Costco-related information confidential and secure, and prohibited them from posting statements that could harm the reputation of Costco or any Costco employee. The latter caught the attention of the United Food and Commercial Workers. They filed charges against Costco for alleged violations of the National Labor Relations Act (the “Act”).
In its decision against Costco, the National Labor Relations Board found that Costco’s policy was too broad and could interfere with Costco employees’ protected right to free speech under the law. Chipotle learned a similar lesson in 2016, as described in a memo by Philip L. Gordon and Kwabena A. Appenteng, both of Littler Mendelson, PC
Almost a decade has passed since the decision in the Costco case. Social media policies, as well as approaches to developing them, have evolved. For example, many companies have moved away from simply having a social media policy as part of a larger policy, such as an employment manual or code of conduct, and opting instead to implement a policy. autonomous social media.
FAQ: Social Media Policy Basics
Here are some FAQs that will help uninitiated readers and potentially even seasoned experts in the field.
Why does my business need an official social media policy?
- provides clear guidelines for employees about how the company expects its online social media presence to reflect company values.
- Help to protect confidential information, the brand and the reputation of the company.
- Can empower employees to be brand ambassadors.
- Help to prevent a social media crisis.
- Enhances and/or complements other company policies (e.g. code of conduct, pharmacovigilance and FD regulations1)
Who in the company should develop and/or maintain your social media policy?
- This type of policy will (and should) have multiple stakeholders. A few to consider:
- Human ressources may be relevant from an employee experience and engagement perspective.
- Investor Relations/Communication may want to make specific reference to social media channels and how they would prefer employees to interact with those channels to help communicate the company story.
- Marketing may want to weave in guidelines on how employees should or should not interact with customers via social media.
- Regulatory may need to prohibit (or facilitate – remember Costco and Chipotle) certain types of behavior.
- Legal may wish to list consequences associated with violations of the policy, as well as cross-reference to other company policies.
Should we involve an external legal resource in the review process?
- Yes. The Costco case described above is a great example of why, at a minimum, you may want to have an outside employment attorney review your social media policy to confirm that it does not. does not violate any applicable employment laws or regulations.
- Also, keep in mind that there are certain industries where state and federal regulators have officially spoken on the use of social media. For example, the US Food and Drug Administration (FDA) has issued guidelines regarding the use of social media for life science and medical device companies. If you are in a regulated industry, check to see if your regulators have issued guidelines on social media policies.
- Also, if your social media policy is going to apply to employees from other countries, it is advisable to involve a local lawyer in that country. See GM’s social media policy for an example of how one company addressed country-specific nuances through an addendum section.
What are the ingredients of a good social media policy?
- Goal and range: State general company guidelines for the use of social media and identify to whom the policy applies, which should generally be your board of directors, officers and employees, and other persons who may act on the matter. Company Name. P&G’s Global Social Media Policy explains both purpose and scope very well.
- Description of confidential information: Since protecting confidential information should be one of the primary goals of a social media policy, it is important to define what is confidential information and provide clear examples. A public company will want to take advantage of its insider trading policy, which likely includes the types of information the company considers particularly sensitive. If applicable, this is also a good opportunity to remind people of organization-wide non-disclosure agreements.
- Cross-references to other related policies: A social media policy typically draws on the principles of other company policies, such as a code of conduct. Where appropriate, reference these other policies (eg, Information Protection, Anti-Harassment, Insider Trading, FD Rules, Non-Discrimination, Privacy, and Cybersecurity).
- Identify who is authorized to speak on behalf of the company: It is essential to clarify that there is a difference between speaking “on behalf of the company” and speaking “of the company”. Wolters Kluwer does a great job of this in its social media policy. Public companies typically have a Corporate Communications/Regulation FD policy that identifies who is authorized to speak on behalf of the company. The Social Media Policy is a great place to reference this Corporate Communications Policy/FD Regulations and explain who is authorized to speak on behalf of the Company. For more on authorized speakers and the use of social media to disclose material, non-public information, see this article from Woodruff Sawyer’s D&O Notebook.
- Acceptable and inappropriate conduct: There is a natural tendency to try to list all types of conduct that are neither encouraged nor permitted. However, including specific examples of what is encouraged and allowed as part of a social media policy can be more effective in driving employee adoption. One “do” worth including is to use common sense when interacting online, whether for business or personal reasons. Some may remember the case of the PR manager who posted a vile tweet before taking off on a flight to Africa and who, before the plane even landed, was effectively fired from her job following the tweet. Perhaps more of a warning for the unwary, it’s best if your social media policy includes a reminder that the internet doesn’t offer a call back and delete feature. See Edmunds Social Media Guidelines for an example of a smart approach to social media do’s and don’ts.
- Contacts for questions: The number of contacts listed in a social media policy will likely depend on the length of the policy and/or the complexity of the business, but there should be at least one primary contact to answer questions about the policy. Contact points should receive training on the policy and the legal framework underlying the policy. This will help ensure that questions and potential policy violations are handled appropriately and in a timely manner.
How often should a business review its social media policy once implemented?
- At least annually. A company may also consider reviewing its social media policy sooner if it is faced with certain changes (e.g. IPO, acquisition, significant headcount increase, or bringing a new drug to market) or as a result of a change in applicable laws or regulations. .
1Regulation FD prohibits public companies from selectively disclosing material, non-public information. It responds to the complaint that, prior to 2000, some investors (such as large institutions) had direct relationships with companies and obtained material, non-public information, such as a company’s expectations for its quarterly results, before the public.