Boards and social media, from a director's perspective.

• Author: Meachin, David J.P.
• Position: BOARD PRACTICES

Until recently, it has been too easy for corporate directors to ignore social media. As noted author Dave Kerpen points out: "Social media is still in its infancy, and many business executives and boards of directors still don't understand how to leverage it for the benefit of their organizations, large or small. In many cases they are too focused on the talking and not focused enough on the listening."

But social media has earned a spot on the board agenda. According to Nielsen, the total time spent on social media in the U.S. increased by 37% to 121 billion minutes in July 2012 from 88 billion minutes in July 2011. Internet users spend more time in social media than any other site. That's a lot of opportunity to enhance a company's brand or impair its reputation.

A recent survey by CEO.com showed a significant gap between the use of Twitter, Facebook and Linkedln by Fortune 500 CEOs and the CEOS of smaller fast-growth companies. Major companies without an effective social media presence are limiting their potential for agility and growth. This of course creates a more level playing field for the goods and services of smaller companies.

In major companies, information flows up and is filtered through numerous layers of management. The end result may bear little relationship to reality. Social media cut through those filters to give executives a customer's-eye view. Never has it been easier to connect with customers and other stakeholders to understand what they are truly thinking.

So, against this rapidly changing landscape, what should directors know and do to further the fortunes of the companies on whose boards they sit?

Let's look at risks first, Social media mistakes can be expensive. When the Internet attacks, which it often does at lightning speed, a company needs to be ready. Tactics for directors to consider:

* Establish internal policies and procedures on how to use social media appropriately and how to react to bad news. CEOs and other executives who interface with the media should avoid off-the-cuff remarks. Vet all comments before posting.

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