THE IMPACT OF

Tuesday 18 March 2014

Sam Gibbins, General Manager, AsiaGRC Solutions

SOCIAL AND DIGITAL MEDIA ON

COMPLIANCE AND LEGAL RISK

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Websites and applications that enable users to create and share content or to participate in social networking www.oxforddictionaries.com

Designed to enable and increase human interaction and relationship building; hence the use of the word 'social'!

What is social media?

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Legal Risk: 'The expenses of litigation of a company'Johnson and Swanson, 2007

Compliance Risk: the current and prospective risk to earnings or capital arising from violations of, or non-conformance with, laws, rules, regulations, prescribed practices, internal policies, and procedures, or ethical standardswww.bankersonline.com

Is this a risk for your business?

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Social and digital media is increasingly overtaking traditional forms of mainstream media, allowing access to information quickly and for people on the move.

It is important to highlight that not all the information on social media networks is accurate or reliable, but the same can be said of other forms of traditional news (think Orson Welles and The War of the Worlds, 1938).

The death of Osama Bin Laden was reported on Twitter before conventional news outlets…

Why is it important?

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www.bbc.comMay 2nd 2011

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An early 2014 report from wearesocial.org revealed that Singapore has the world’s second highest penetration rate (59%), more than double the global average of 26%. The highest globally with 80% was UAE.

User statistics (for Singapore):2.2 hours per day on social media channels5+ hours per day surfing the internetLess than 2 hours per day surfing the internet on mobile devices

Singapore is a very 'connected' jurisdiction

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Wearesocial.orgDecember 7th 2012

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Firstmonday.orgMay 6th 2013

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The interaction between business and consumer has fundamentally changed with the advent and growth of social networks.

Previously business would spread messages to their audience with the use of third party intermediaries, such as print media or agency work, whereas now they can talk directly, and converse with their consumers in real time.

The Business Context

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The dynamic is ever changing and presents challenges for businesses, as they may have thousands of customers trying to speak to them, but only a few people able to speak back.

The purpose of social media is human interaction; so people need to be involved.

The human element is also the area where issues arise regarding wrong doing and exposure to increased risks.

The Business Context

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Social media is not fundamentally different to other forms of marketing and communication; the end product is the same but the method might vary.

Policy is needed to ensure you remain protected and so your employees know their rights and obligations. Unclear or flawed policy can lead to serious issues with regard to the employee/employer relationship.

There needs to be a balance between an employee's ability to express personal views and opinions online, and the employer's legitimate interest in preserving its reputation and business.Ashurst, Fwd: Thinking, February 2014

The Social Media Compliance Regime

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In the case of Linfox Australia Pty Ltd v Glen Stutsel [2012];

'…the Full Bench has signalled that there will come a time when the Tribunal will no longer accept ignorance or naivety as excuses for the inappropriate use of social media by employees'. Ashurst Australia Employment Alert, October 4th 2012

The 'Intersection' of social media and employment

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HMV 'Twitter Meltdown' @hmvtweetsJanuary 31st 2013

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It is important for organisations to realise that often social media is conversational; even when people post status updates on Facebook, they are opening a dialogue with themselves and hoping that someone else will join in.

Is this the same as having a chat in the pub or coffee shop with friends?

The difference is that this information is publicly available, or can often easily be made publicly available.

As evident above, it is also permanently recorded and so evidence is there for all to see and refer to.

Who is the Intended Audience?

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Many firms seem to go blindly into social media without thinking through what they are doing and what it is they are trying to achieve.

It is important to consider:– What is your strategy?– What are your objectives?– Who is involved and why?– Who has overall responsibility?– What do you do when things go wrong?

Strategy

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Social media blurs the line between work and private life. Attempting to control all private communications of employees is a step too far.

The general proposition holds true that an employer can require its employees not to damage the employers reputation, but also that employees cannot simply draw a line around what they do outside work and expect immunity from employer sanctions if their conduct affects their employer business.

Public v. Private

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Every jurisdiction has its local customs, quirks and local norms which cannot be ignored. Neither can recent domestic issues and news stories.

Large firms may have a global policy but may have amendments for local offices to make sure they have a level of consistency but also a degree of control over regional variations.

Policy needs to be positive and prescriptive but not overwhelming.

Global or Local?

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Who has the keys to the car?

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Oh dear oh dear…

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'There is no such thing as a private space in the social media. In fact, social media is public. Therefore, it is important that whatever we say and express in the social media should be done knowing that it would become public.‘

Lim Swee Say, NTUC Secretary GeneralOctober 12th, 2012

Getting Culture (very) Wrong

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Anton Casey

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GoogleMarch 11th 2014

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How about Timing?

Think carefully before you start a campaign inviting comment,

ideas, thoughts or feedback from the public. Consider your brand

'today' and where you stand with your audience, as well as others

who may be inclined to get involved.

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Starbucks Tax disaster… www.econsultancy.com29th November 2013

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#AskJPM Business InsiderNovember 14th 2013

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The all important recovery!How do you recover from a PR disaster?

What should you do to make amends when it really goes wrong?

A number of firms have seen first hand the problems that arise if they don’t respond adequately to a brewing crisis.

It is not just the adequacy of the response, but also the timing.

People can get very angry, and they do so very quickly!

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Most likely to come from roles such as sales, marketing, PR. These are outgoing individuals who have the soft skills and the experience to deal with other individuals, particularly those tricky customers who can cause problems.

Less likely to come from legal or IT. Legal staff can take a long time to respond and IT staff are not always the most outgoing and verbose in their external dealings.

But as we have already seen, even the CEO can really get it wrong!

Who are your 'Social Media Practitioners'?

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Legal Risk: 'The expenses of litigation of a company'Johnson and Swanson, 2007

Compliance Risk: the current and prospective risk to earnings or capital arising from violations of, or non-conformance with, laws, rules, regulations, prescribed practices, internal policies, and procedures, or ethical standards.www.bankersonline.com

Is this a risk for your business?

This presentation material is intended to provide a summary of the subject matter covered for training purposes only. It does not purport to be comprehensive or to render legal advice. No reader should act on the basis of any matter contained in this presentation without first obtaining specific professional advice.

Sam GibbinsGeneral Manager, Asia

sam.gibbins@grcsolutions.com.au+65 6622 5666+65 9008 5569

www.GRCSolutions.com.au