Grant Thornton LLP and Financial Executives Research Foundation (FERF) identify key themes in the 2011 social media study
CHICAGO, Nov. 16, 2011 – A recent survey conducted by Grant Thornton LLP and Financial Executives Research Foundation, Inc. (FERF) – Social media and its associated risks – finds that executives of public and private companies see social media as a growing set of marketing tools, but have not yet developed the necessary compliance and risk policies and procedures.
More than half (53%) of the senior financial executives who responded to the survey see the corporate use of social media increasing significantly over the next 12 months, and almost half (48%) feel that social media will be an important component of their future corporate marketing efforts.
Co-authored by FERF Senior Associate, Research, Thomas Thompson, Jr., Grant Thornton Business Advisory Services Managing Director Jan Hertzberg, and Grant Thornton Forensic and Litigation Services Principal and Practice Leader Mark Sullivan, the survey found that while some companies have already established a strong social media presence, the reality of social media is that the next Facebook or Twitter is likely in the development stage right now, and further change in this space is inevitable.
“The speed with which social media has grown in the last five years caught many executives by surprise,” said Hertzberg. “Social media is here to stay. Far-sighted companies that establish ground rules for using social media, monitor compliance and implement governance structures to support its adoption and integration will reap benefits over the long-term.”
The survey revealed that more than three-quarters (76%) of respondent companies do not have a clearly defined social media policy, and more than half (61%) do not have an incident management plan to help them deal with instances of fraud or privacy breaches.
“Social media cuts across many areas of a company (such as HR, marketing, communications and legal, among others),” said Thompson. “Therefore any policy surrounding it should be the result of a multidisciplinary approach.”
Executives are allocating more funds to IT security overall, but not necessarily to address risks associated with social media. Many companies do have e-mail communication and technology usage policies, but very few companies have policies that specifically address social media governance and risks.
“Management often thinks of breaches as stemming from lost laptops or hacking events. These are usually brought to someone’s attention immediately after the event,” said Sullivan. “Social media allows for small disclosures over a period of time that, when taken in aggregate, could run afoul of applicable regulations.”
The 23-question online survey was conducted during August and September of 2011 and was completed by 141 senior financial executives from public and private companies. FERF also conducted in-depth interviews involving eight open-ended questions during September 2011. Social media and its associated risks is based on the findings of both the online survey and the in-depth interviews.
To read the full report, visit www.GrantThornton.com/socialmedia.
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About Financial Executives Research Foundation, Inc.
Financial Executives Research Foundation (FERF) is the non-profit 501(c)(3) research affiliate of Financial Executives International (FEI). FERF researchers identify key financial issues and develop impartial, timely research reports for FEI members and nonmembers alike, in a variety of publication formats. FERF relies primarily on voluntary tax-deductible contributions from corporations and individuals, and publications can be ordered by logging onto www.ferf.org.