Social Networks poses serious Reputation Risk

Social network poses real reputation risk, a report by audit firm Deloitte has revealed.

The results of Deloitte’s third annual study Ethics & Workplace Survey, which examines the reputational risk implications of social networks, reveal tension between employers and employees around the use of social media. According to the survey, conducted on 2,000 employees and 500 top executives in the United States, 74 percent of respondents said they believe online social networks make it easier to damage a company’s reputation.

“Online social networks, which enable individuals communicate and share their knowledge and opinions with others, are constantly developing. With this strong phenomenon, the lines between individuals’ private and corporate identities are gradually disappearing,” said Sibel Türker, partner at Deloitte Turkey.

“Individuals have a right to communicate on online platforms, but this can sometimes create negative results that might affect the reputation of corporations and brands. The new Deloitte survey, which reveals the aforementioned concerns, will offer a broad perspective for executives.”

Risks for reputation:

Among the respondents of the Deloitte survey, 74 percent said they agreed that online social networks, such as Facebook, Twitter and Youtube, bear certain risks to brand reputation.

Corporations are sometimes obliged to struggle against the incidents that damage corporate reputation. Online debates, suggestions and criticisms affect enormously a substantial proportion of the news on global brands.

Some 15 percent of the executives surveyed said they are prepared against reputational risks related to the use of social networks, while 58 percent said they are aware of the issue and are discussing measures. Only 17 percent of executives surveyed said they have programs in place to monitor and mitigate possible reputational risks.

Some 60 percent of business executives said they believe they have a right to know how employees portray themselves and their organizations in online social networks, while employees disagreed, as 53 percent said their social networking pages are not an employer’s concern.

The survey also showed there is no easy answer on what kind of attitude business owners and executives should pursue in the face of the current environment. It is not easy to overcome the risks in this field via certain rules or policies. The Deloitte survey showed that even well-defined corporate rules will not change the attitudes of around half of the participants. Therefore, it is important to secure the cooperation of employees through value-based cultures, according to Deloitte.

There is of course another side to the use of social networks said Deon Binneman, international speaker and consultant on Corporate Reputation. The use of social networks can be seen as an engagement tool which should be included in a strategic stakeholder communication plan.

He also said that it was vital to educate and train employees in the importance of reputation (individual & company) so that there would be a clear understanding of reputation as an asset and a risk. If the use of social networks are seen as a strategic tool, then many alternative measures could be dreamed up.


1. Can an employee comment on the CEO’s Blog?

2. What about an internal Twitter messaging service, so that we can improve cross-flow of communication?

3. Does the organisation have a listening capability? One that scans internal chatter and monitor online conversations?

All social networks have done is to radically transform the way employees and stakeholders can communicate. Now organisations have to close that transformation process by radically chnaging the way organisations and employees think, act and participate.

This idea was proposed long ago by the author Joyce Wycoff in her brilliant book, Transformation Thinking. This book offers innovative techniques to promote creativity, problem-solving and communication in organisations.

Online Reputation Management is eveolving into a specialist function and Reputation Mnaagers across the Globe should get up to speed with the latest developments in this field.