Oct 3rd 2013
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By Jason Bramwell
A recent survey of more than 100 senior-level executives from public and private companies by Chicago-based audit, tax, and advisory firm Grant Thornton LLP and the Financial Executives Research Foundation (FERF) found that while social media use by companies continues to grow, almost three-quarters of respondents are concerned about the potential risks involved in the use of social media.
"Social media has changed the way individuals and organizations communicate with each other, which has increased transparency, but has also increased risks for companies," Jan Hertzberg, leader of Grant Thornton's Business Advisory Services' IT Audit, Security, and Privacy practice in Chicago, said in a written statement. "The increase in risk and investigations related to social media underscores for organizations the need to have a considered approach to social media risk assessments."
According to the 2013 Social Media Risks and Rewards report, 71 percent of executives surveyed were concerned about the potential risks of using social media, but they believe the risks can be mitigated or avoided. Thirteen percent of respondents reported being "very concerned" about social media risks.
While there are many risks to be considered when using social media, executives were asked to prioritize the following six:
- Negative comments about the company
- Out-of-date information
- Disclosure of proprietary information
- Exposure of personally identifiable information
- Use of personal social media by corporate executives
Executives of private companies cited negative comments about the company (36 percent), disclosure of proprietary information (32 percent), and out-of-date information (18 percent) as the top three social media risks. Use of personal social media by corporate executives (0 percent) ranked as the least important risk.
Fifty percent of public company executives cited disclosure of proprietary information as the top social media risk priority, followed by negative comments about the company, out-of-date information, and fraud – each at 17 percent. Use of personal social media by corporate executives (0 percent) was the least important risk.
With the rise of social media use, there is a need for risk management; however, this remains an area where companies are lacking. Only 59 percent of executives surveyed said their company performs a social media risk assessment. The marketing/public relations department is most often (35 percent) the primary department tasked with social media risk management.
Arrow Points Up for Social Media Usage
Despite executives' concerns about risks, two-thirds (66 percent) of respondents see their company's use of social media slightly or significantly increasing during the next twelve months. More than two-thirds (68 percent) felt social media will be critical for all corporate efforts or an important component going forward. Only a small percentage (1 percent) thought social media was a complete waste of time.
More than one-third (38 percent) of executives said their companies use social media for brand awareness, while 27 percent use it for recruiting purposes and 14 percent use it to identify participants/customer profiling and identification.
With all the social media platforms available to companies, LinkedIn (32 percent), Facebook (20 percent), and Twitter (18 percent) were the three most widely used among respondent companies.
"Social media is our primary marketing tool," Mark Scovera, president of Access Florida Finance Corporation, noted in the survey report. "Twitter is our primary vehicle, but we also use LinkedIn, YouTube, and Facebook. We constantly review the applicable tools and adjust our processes. We have a full-time individual dedicated to social media marketing. We engage our followers with interesting and informative articles, with the idea to engage in a direct, one-on-one conversation."
Social Media Training on the Rise
In perhaps a sign of shifting attitudes toward social media training, in 2013, 36 percent of respondents reported their companies conduct social media training, compared to 21 percent in 2011. The percentage of companies that do not have training dropped from 58 percent two years ago to 45 percent this year.
About the survey:
FERF, in collaboration with Grant Thornton, developed a thirty-two-question online survey and conducted in-depth interviews for the Social Media Risks and Rewards report. The survey was conducted in May and June of this year and was completed by 111 senior-level executives from public and private companies. The information contained in the report is derived from insights gathered during the online survey and the in-depth interviews.