Canadian Underwriter

Socially Awkward

September 2, 2016   by Angela Stelmakowich, Editor

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Being social is all well and good… until it no longer is.

Social media is a given today, whether for personal or business use. But along with these in-the-moment interactions comes a bit of risk (sometimes more), including for business leaders.

Findings from a new online poll of 1,000 Canadians indicate that social media is the medium most able to cause damage to public image, whether for an individual or an organization.

In all, 84% of those taking part in the poll reported that social media channels such as Twitter and Facebook “can do a great deal of damage to the image of an individual or organization,” notes Signal Leadership Communication Inc. (SLC), which released the findings in late August.

Angela Stelmakowich, Editor, Canadian Underwriter

Angela Stelmakowich, Editor, Canadian Underwriter

That percentage exceeds the 72% of respondents who felt the same about online news and broadcast television, and far exceeds respondents who felt that way about print newspaper, 52%, and radio, 48%.

Millennials, 88%, and the “general population”, 84%, said social media is able to damage image the most compared to other mediums.

The threat to image damage is such that corporate communicators “need to design social media presence accordingly and invest the necessary resources,” advises SLC principal Bob Pickard.

“It all starts with the leaders, with whom an often-demanding public increasingly seeks to have a direct personal connection through online networks,” Pickard says.

“There’s far more risk for something to go wrong and explode virally. If it does, the public’s attention is on the leaders online, so they themselves need to understand this new digital dynamic,” says SLC principal Janice Mandel.

A survey out of the United Kingdom a few years back showed young consumers are becoming more likely to complain about products on social media. Half of the 18- to 34-year-olds taking part in the 2013 poll from XL Group said they are more likely to complain via social media than in the previous year.

Having people use social media channels to interact with companies and brands “is great for a company when it is getting ‘liked,’ but when things go wrong – a large recall because there is a fault with a product, for instance, – then a company needs to have the tools and capability to respond – fast,” Ed Mitchell, chief underwriting officer of XL’s product recall group, said at the time.

“Not doing so can cost a firm the loyalty of its customers and its hard-earned reputation,” Mitchell noted, emphasizing companies need to develop response plans with their insurance companies.

Also in 2013, a Marsh report noted social media has intensified the political risk some organizations face and that a rear-view approach to examining related risk management is not sufficient.

Social media was found to exacerbate political risk by accelerating the formation of political protests, and enabling civil unrest to more easily transition.

Unrest could fuel political risks such as expropriatory actions, forced abandonment, forced divestiture, property damage, contract frustration, business interruption and trade disruption.

Clearly, use of social media can be positive as well. In an emergency, for example, it offers accessibility, speed and the ability to communicate with many people, thereby allowing information to be pushed to individuals through their mobile devices.

Social media can also be used as an investigative tool.

A Deloitte poll out of the United States last year found 45.2% of the 2,490 respondents use publicly available social media content when conducting investigations.

Social media analytics can help reveal connections useful in fraud and corruption investigations, pre-deal diligence and cyber threat sensing, Deloitte reported.

In addition, social media analytics give organizations a means to scan for previously identified threats and potential newer threats, it noted.

Social media can bring with it both good and bad. While the former should be welcomed, the latter must be assessed to allow for responses that are as quick as that next post.

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