Social media platforms are invaluable for connecting companies with their customers, the financial community, and the media. Sharing information on social media can reduce the information asymmetry between companies and their stakeholders in a timely manner. However, several factors, including a lack of planning, controls, and training, combined with the unpredictability of online behavior, can expose companies to considerable risk.
Ill-advised social media posts and lax oversight can cause serious damage to a company’s reputation, trigger investigations by regulators, damage long-term relationships, and introduce cybersecurity threats. Of course, companies and individuals can try to be selective about the disclosures they make on social media and avoid tweeting negative information. But even positive and well-meaning posts can lead to negative outcomes. Given the inherent risks, companies need to become more disciplined about their social media activities and monitor them more closely. However, companies are not ignoring the risks of social medi altogether. The risk associated with employeee use of social media comes in a variety of forms, the most prevalent risk being the effect on branding and reputation via the employees use of social media channels exposing for scams and phishing attacks, followed by fraud and counterfeiting via social media accounts.
The growing number of cybersecuriy risks and the expansion of responsibility for managing these risks beyond the IT department, make it imperative that organizations update their security policies and processes for the digital age. Companies need to review their policies and procedures to ensure they cover the new risks introduced by social media and mobile communications, including third party, public and consumerized infrastructure, as well as internal and external threats.