Reputation Risk Implications of Social Networks

According to a US Ethics & Workplace survey, 60 percent of business executives believe they have a right to know how employees portray themselves and their organisations in online social networks.

However, employees disagree, as more than half (53 percent) say their social networking pages are not an employer’s concern. This fact is especially true among younger workers, with 63 percent of 18–34 year old respondents stating employers have no business monitoring their online activity.

According to the third annual Deloitte LLP, survey employees appear to have a clear understanding of the risks involved in using online social networks, as 74 percent of respondents believe they make it easier to damage a company’s reputation.

Sharon Allen, Deloitte’s chairman of the board,says with the explosive growth of online social networks, such as Facebook and Twitter, rapidly blurring the lines between professional and private lives, these virtual communities have increased the potential of reputational risk for many organizations and their brands.

Allen says while the decision to post videos, pictures, thoughts, experiences and observations is personal, a single act can create far reaching ethical consequences for individuals as well as employers. Therefore, she says it is important for executives to be mindful of the implications of this connected world and to elevate the discussion about the risks associated with it to the highest levels of leadership.

The survey says a mere 17 percent of executives surveyed say they have programs in place to monitor and mitigate the possible reputational risks related to the use of social networks. Additionally, while less than a quarter have formal policies on the medium’s use among their people, nearly half (49 percent) of employees indicate defined guidelines will not change their behavior online.

One-third of employees surveyed never consider what their boss or customers might think before posting material online.

Allen says this fact alone reinforces how vulnerable brands are as a result of the increased use of social networks. As business leaders, it is critical that we continue to foster solid values-based cultures that encourage employees to behave ethically regardless of the venue.

The complete results of the 2009 Ethics & Workplace survey reflect opinions of employees and business executives on questions on ethics, work-life balance, reputational risk and the prevalence of boardroom participation as it relates to increased employee social networking.

Opinion Research conducted a telephone survey among a national probability sample of 2,008 employed adults comprising 1,000 men and 1,008 women 18 years of age and older, living in private households in the United States.

Opinion Research also conducted an online survey of 500 business executives. The sample for the study came from a panel of executives across the United States, including company owners, directors, CEO’s, controllers, EVPs, CIOs, VPs and board members.