Corporate Governance and Social Media : A Brave New World for Board Directors
Publication of secret diplomatic cables through Wikileaks shocked governments and provided a sudden wake-up call to all who thought they were safe from the new power of social media. Consequences went well beyond mere embarrassment; they helped spa...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/09/16750905/corporate-governance-social-media-brave-new-world-board-directors http://hdl.handle.net/10986/17092 |
| Summary: | Publication of secret diplomatic cables
through Wikileaks shocked governments and provided a sudden
wake-up call to all who thought they were safe from the new
power of social media. Consequences went well beyond mere
embarrassment; they helped spark the first 'Arab
spring' uprising in Tunisia, and other forms of social
media helped sustain popular dissent elsewhere in the Middle
East and North Africa region. What quickly became obvious is
that communications online had a demonstrated a new capacity
to upend political agendas everywhere. Widespread use of
social media has equal potential to transform corporate
agendas. Tools used at Tahrir Square are also available in
the capital market for use by directors as much as by
disgruntled employees, by consumers both satisfied and
aggrieved, by competitors, and by shareowners both retail
and institutional in confrontations with the board. By the
same token, though, corporations can use social media
channels creatively to improve stakeholder loyalty, and
improve performance. Corporations can develop new means of
constructive dialogue with different constituencies.
Benefits might include early warning of threats,
identification of new ideas, and amplified means of
responding. New communication channels can be a force
multiplier and a risk management tool to advance the
interests of the business. Still, corporate governance and
social media are trends newly met, and market participants
are only at the very beginning of a learning curve. Santiago
Chaher and James David Spellman do a powerful service by
providing a forensic analysis of how social media work. The
authors sketch out latest developments. Then they focus on
what a forward-thinking board needs to know to ensure that
the company is ready to manage the risks and take full
advantage of the opportunities presented by social media.
Part of the challenge is for individual directors to educate
themselves about social media from technology to
terminology. They need to know the right questions to ask to
test whether the firm is leading or being led. They need to
investigate how all the various stakeholders the company
affects are using social media. And, most importantly, they
have to understand that this is an ongoing, not a one-off,
learning process. |
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