New Thinking
A roadmap for mid-market business owners
Adapting customer loyalty
Australian and UK rail franchising experiences
Australian Regional Capacity Index
Better business reporting – the journey continues
Big Data and why it matters
Chinese Investment in Australia Demystified
Cloud – enabling business strategy
Corporate growth
Critical actions for a positive future
Cyber and digital security
Cyber security – Detect cyber threat
Cyber security – Protect your business
Cyber security – Respond to cyber threats
Cyber security – Secure organisational growth
Disrupting the board
Empowering Australians' impacted by their service
Financial reports de-cluttering in ASX200 companies
Financial System Inquiry – Innovation: Digital identity
Financial System Inquiry – Regulatory system
Financial System Inquiry – Superannuation and retirement incomes
Future of investment management
Global shifts in defence and security
Harnessing the power of disruption
Here comes the M&A boom
Human services: rethinking regulation
Improving cities through urban renewal
Indirect Tax and International Tax – double the trouble?
Infrastructure trends
Pricing: Defining the right strategy
Promising prospects in Australian corporate finance
Resource sector outlook
Risk transformation: Embracing conscious risk taking
Risk transformation: Engaging the first line of defence
Risk transformation: What makes a great CRO?
Road testing a public service reform agenda
Social media risks
Tax reform – shaping the future
Tax transparency and morality
Technology and growth: working with the 'connected customer'
Technology's impact on investment industry
The constantly changing role of the CIO
The power of population
The private side of public investment
Transforming for consumer growth
Urban and regional growth: a smarter way
Utilities: technology is the future
Value of Audit
What is the future for government?
Social media risks


Social media risks

Social media (SM) enables two-way communication and collaboration. Organisations can (and have) utilised it to great success building a competitive advantage, generating business and engaging with their customers on a more personal level.

Yet many may not realise the full potential of SM, or engage poorly, which could lead to missed opportunities and/or open them to a variety of risks.

For every SM marketing success, however, there are a dozen examples of organisations getting it wrong. A single public failure can have far greater ramifications than multiple successes. Boards and management teams must be aware of, understand, and manage the risks that online conversations may present to their business. This is especially important for listed companies.

Gary Gill
"Today's customers expect that the organisation they do business with will be 'on' social media and will be contactable via the most prominent platforms such as Twitter, Facebook or LinkedIn."
Gary Gill
Partner, Risk Consulting
Handling grievances in a professional and considerate manner is critical to achieving a successful resolution for both the customer and the company.

This two way communication increases opportunities to connect with customers and prospects but also increases risk, especially as corporate regulators and bodies (such as ASIC, ACCC and the ASX) are already announcing compliance requirements and guidelines with respect to social media use.

A fundamental question you must ask is whether your marketing department or agency is aware of these guidelines – let alone the risks to reputation and your bottom line. Most SM activities will come from a marketing perspective, without necessarily including an eye to risk management.

Management must ensure the organisation comes together to capitalise on the opportunities SM presents but also heads of departments need to share responsibility for managing risk and training staff on how to do this in their day-to-day jobs.

Risks you need to watch out for

Social media risks fall under three main areas, operational, regulatory and reputational (SM can be a risk itself, or alternatively, it can accelerate traditional risks).

  • Operational risk can involve copyrights, employee non-compete and confidentially agreements, monitoring employees on social media, who ultimately 'owns' the content you post on LinkedIn, Facebook, Twitter, etc.
  • Regulatory risk is all about 'public-company disclosures' and what official information is made public, when and by whom. If you tweet ‘great numbers’ before your actual numbers are released, what disclosure rules have you just broken?
  • Reputational risk may be dealing with what you or your employees say online as much as what others say about you (and how you react to that).

Additionally, SM can result in supply chain risk and business continuity issues through to IP and confidential information leakage. These impacts are occurring with a speed and frequency that often catch many organisations by surprise.

Managing risk – better practice

  • Adopt a comprehensive SM strategy that outlines the requirements (and culture) of your business.
  • Training is critical to ensure SM is an asset for your organisation, ensuring everyone is vigilant but collaborative about getting it right.
  • Carry out an annual SM 'health check/diagnostic' to quantify exposures and provide recommendations on how to best address various identified risks.
  • As the ASX suggests, utilise issues based monitoring, in particular when market sensitive announcements are being made.
  • Consider implementing appropriate monitoring during a crisis or as a precautionary measure when incidents or issues may occur.
  • Include SM within your reporting framework – beyond marketing. A diagnostic report can also identify what measures need to be in place regarding your SM exposure and risk.

Ultimately, regardless of all of the procedures you put in place, there is one thing you need to do: be vigilant. Create a culture where everyone in your organisation understands how to protect your business brand and their own personal brand.

Share this

Share this

The Social Banker Series

The Social Banker Series
This series examines key aspects of social media for retail banks and explores the most pressing questions facing bank executives.

Social Media Risk Management: Why it matters

Social media risk management: Why it matters
This paper outlines the risks associated with social media and how organisations should respond.


Digital trends in Financial Services
The first principle of getting technology right is to engage people the way they want you to deal with them discusses Daniel Knoll.

Risk Consulting

KPMG works with organisations to help them better understand their risk exposures and develop robust control systems and measures.