The results of a study released by Montieth & Co. in January indicated that as employees have become more connected through social networking, insider trading has become more socialized. According to the study, given their age (more than half of the 76 people charged with insider trading since August 2009 were between the ages of 31 and 40), these individuals grew up in their professional lives with social networking as a model for interacting with others, for creating bonds and exchanging information.
While insider trading is a clearly illegal activity, there are many other corporate risks that can emerge due to social media activity but are not quite as obvious, including libel, loss of intellectual property, or harassment. The question becomes: What is the proper balance between defending employee rights and protecting the companys reputation when creating a social media policy? Many companies have struggled to find this balance, especially as employee access to these platforms becomes almost constant during the workday.
With social media risks and the need for corporate policies growing, how can businesses tackle this issue?
Understand employee audiences
The days of companies just having to be concerned about the online activities of employees who are sitting at desks with computer access are over. Today almost all employees, from the loading dock to the C-suite, have smartphones in their pocketsand therefore almost 24/7 access to social media platforms. When identifying risks and developing social media policies, companies must take this growing employee audience and the potential risks they pose into accountfrom explaining to a C-level executive why posting an update on their travel plans might lead to M&A rumors, to telling manufacturing employees why they should not post pictures of one another at work because a product or process may be in the background, and public distribution could give up valuable company intellectual property.
