1. Absolute Consult presents:
“Social Media Compliance”
Social networking is gaining rapid adoption by business professionals to increase
brand awareness, client prospecting, and customer retention and loyalty.
85 percent of financial services professionals under 50 are using social media! As this
communication channel matures, these numbers are sure to increase
This trend carries with it a wide array of legal risks, and as such requires the same
compliance principles that govern e-mail and IM retention — this extends to tweets
and LinkedIn profiles
Whether your firm allows social networking or not, employees are using these sites to
help them build business, leaving the company open to compliance violations.
Therefore, it is essential to ensure company internal policies and archiving systems
extend to these channels to remain compliant
This presentation covers basic guidelines for ANY type of business, with real world
examples along with the consequences of getting social media wrong
www.absoluteconsultgroup.com
2. Lecturer’s Profile
Mr. Acevedo has 20 years experience as a practitioner in financial services. He possesses broad and
deep Global buy side Compliance, Operations and Risk Management experience in large and small
organizations, notably at Morgan Stanley Investment Management.
He has created operational support processes from scratch in startup environments and been
responsible for all operational aspects including month end NAV reconciliation and administration of
onshore as well as offshore structures.
He is currently a Part-time lecturer at Singapore’s Nanyang Polytechnic, in the School of Business
Management.
EDUCATION
Pace University, New York, USA
Master of Business Administration - International Economics
St. John's University, New York, USA
Bachelor of Science – Finance
International Compliance Training Academy, Singapore
Diploma in Compliance
3. Why should I care about social media?
It has just about supplanted traditional media in terms of
reach…did you know that the death of Osama Bin Laden in
May 2011 was actually first made public on Twitter?
4. What IS Social Media?
Blogs, social networks, community-specific websites, and
photo/video sharing platforms
6. Social Networking Sites
Estimated to be more than 250 active (100,000 visits per day or
more) social networking sites in Pacific region - Across languages,
topics and either integrated into major portals or separate.
10. Why do you need a Social Media Policy?
•To protect yourself…there are policies about sick and personal days,
workplace attire, and workplace safety…
•There also needs to be a policy about how your company
communicates with the outside World
11. You need to:
Your employees!
• Internal guidance is critical, though!
•Social media doesn’t violate company policy; PEOPLE violate
company policy
13. Basic Precepts
• No one outside the social media practitioners (Marketing, public relations, etc) may
use Social Networking on behalf of the company
• Everyone can communicate on behalf of the company using social media, but needs
to go through a special certification and training course first
• Create a policy that establishes guidelines for how employees can use and enjoy
social media…and spell out the consequences for moving beyond those guidelines
• Do not start from scratch…leverage your existing code of conduct and compliance
manual. This tells employees what sorts of behaviour you expect from them and
what kinds of things they are allowed to say and share and what kinds of things they
need to keep secret or not say. Then create different policies (or sections) that deal
with different facets of social networking
14. Best approach
Don’t write a rule or process for every single social network, every possible type of interaction you
have with customers, and the types of things you are allowed or not allowed to say. Leave it as
general as possible, referring to “social media” and understand that it means any and all social
networks and blogging
If you do it right, your code of online conduct should cover the overall best practices of online
communication without getting into the fine details of each and every network
Create your overall code of online conduct , and then add new sections or specific policies as the
need arises
Base your policies on need and actual usage (experience). Don’t write them well in advance to cover
that one instance that might or might not ever happen
As time goes on and the need further arises, create separate policies (or sections) on both the
personal and company usage of
Blogs and blog commenting
Facebook
Twitter
LinkedIn
YouTube
They should focus on best practices and general guidelines, just like the online code of conduct
Policies need to include information about how, or even whether, employees may represent the
company on their personal networks
15. “Work” vs “Private” Social Media
Employees and management have to understand that
social media blurs the distinction between work life and
private life
An employee can create a LinkedIn account which shows
their company, their job description and their private
activities, some of which might be problematic to clients
or colleagues
Ownership – who owns your content if an employee sends
a tweet or writes a blog post?
What can employees do at home?
16. Practical Example
•Your company has just closed a
significant contract with the government
of China
•Your project manager runs a website
and/or has something like this
plastered all over his social media
presence:
17. “Global” vs “Local” Standards
Not everyone is going to want to adopt "American"
standards
An organization's approach to social media and social
media compliance will vary according to their culture and
objectives
There is no "one size fits all“
Organizations need a "global standard" but can have "local
standards" for each market they operate in
18. Social Media policy also needs to…
Be positive and proscriptive – focus on what employees CAN do, instead of being
negative and restrictive, detailing everything employees can’t do. That doesn’t mean
you can’t have anything negative in it, but the overall tone needs to be positive
Discuss consequences for violations – people have been fired for things they said
on social media channels, regardless of how ill-advised the firing might have been.
Your social media policy needs to avoid any confusion and surprise by stating up
front what will happen if policies are violated
Remind people to be authentic – at the end this is what social media networking
all about
Encourage people to be on their best behaviour – even when they are online
during personal time
Remind people to do their jobs – time spent on social media is for work purposes
only
Remind people to maintain privacy – Never discuss specific customers, share their
problems, and definitely don’t link to them unless you have their permission
Spell out who is responsible for making final decisions about issues that have
not been covered
19. What should you do about privileged
information and avoiding giving advice?
Your social media policy needs to address what is considered
privileged information or professional advice, and what things you can
and cannot discuss on a social network. For example:
Customer complaints: “I’m sorry, we can’t answer any questions on
Facebook because of privacy. I realize it’s inconvenient, but could you
call our main number and explain your situation? They will be able to
connect you with the right department”
Someone writes a comment to a FaceBook page with a legal or medical
problem “I’m sorry, I’m not able to answer that question directly. I don’t
have enough information to give you the best answer, and don’t want to
give you the wrong answer. You could make an appointment to see me,
and I can help you”
A relative of a patient or client sends you a message on Facebook mail,
asking about his relative’s case….you can’t share any information over the
phone and definitely not by email, FaceBook, Twitter, blog posts, etc…a
simple “I’m sorry, I’m not able to discuss that” will do
20. Trust employees, but not everyone should
speak for the company
Be careful about who exactly will be the ambassador
and public face for your company on social
media…some people are just not qualified to fulfill
this role
21. Who should enforce it?
The person who is in charge of your social media
efforts and your legal department or compliance
representative, or both
22. Let’s be clear on responsibility
Social media often gets inaccurately blamed for violations
of company policy or mistakes made by its users
Socia Media is no more to blame than other forms of
media (text, email, snail mail, TV, etc)
If your employees make a mistake on a social network, it
does not mean your company should go run and hide from
the social network
It means the company should do a better job of educating
and empowering its employees to use the networks
appropriately
23. What if people spend too much
time on Social Media?
When this happens, work suffers. The social media
director, employee’s supervisor, or both will need to
step in and have a discussion individually…deal with
the distraction the same way you would with any
other workplace distraction
24. Assign Responsibility and be Accountable
Department Pros Cons
Most likely to blast unwanted
Understands how to create a commercial messages. Not
persuasive message, know how to experienced at solving customer
measure ROI, is most willing to try problems. Easily distracted by other
out new tools. Used to speaking to new tools. Can easily slip into
Marketing customers in their own language Marketing jargon
Consummate networkers who are
likely to embrace social media if it Most likely to avoid social media if
helps them avoid the phones. Also they don't see immediate results.
more likely to use social media to Also likely to try blasting commercial
build relationships with potential sales messages in pursuit of quick
customers. This helps them avoid results. May be a new way of
Sales their customer's gatekeepers thinking for old school salespeople
Most appropriately trained Don't usually think in terms of sales
employees to deal with real-time and ROI, but in reads, listens and
communications, speaking on behalf views. Must be careful not to look
of the organization, and building down on small-time bloggers and
PR relationships with customers social media practitioners
Not experienced in writing
persuasive marketing messages or
using sales techniques. Might not be
Customer Experienced at handling customer trained to follow up on sales and
Service complaints and problems marketing questions
25. Who should NOT be in charge
Legal, IT or compliance departments
Legal: May take days or even weeks to answer a single
tweet…not accustomed to a real-time
response/interaction
IT: Not equipped to deal with customer
service/sales/marketing/ issues OR talking to ‘media’
types
26. The Ideal Setup
A ‘committee' approach...select one or two people from each dept to
serve. Put the committee in charge of your social media efforts. Be
careful, though:
Don't make this a democratic committee where everyone has an equal
vote...such a process will lead to paralysis and no final decision
Put one person in charge of the entire social media effort
(everyone else can make recommendations and give input)
A social media committee can also serve as a clearinghouse for the
different departmental functions
27. Social Media Management is for Senior Staff,
NOT interns
Even though younger employees might be whizzes at Twitter and
Facebook, they don't:
Necessarily know how to create an extended strategy
Have experience responding to customer complaints
Understand how to market and sell enough to be able to do it
effectively online
Even know how to calculate the ROI and do basic market research
By using a more experienced employee, your are able to draw on
their real-world, full-time work experience. They can recall similar
situations, understand the gravity of what they are doing, and have
experience building and executing campaigns, measuring the
results, and speaking with customers with a sense of purpose and
company mission
28. Who are the Social Media Practitioners?
They come from marketing, PR and Sales:
Used to dealing with the public
Generally outgoing and easy to get along with
Used to multitasking and can manage the sometimes fast pace
of social networking and conversations
Tend to be more social in nature and view these online
networks as extensions of their real-world connections, rather
than a replacement or substitute for it
29. What if your employee becomes a Social
Media rock star?
Such individuals become more attractive in the job marketplace and potentially
put your company in the position of allowing them to build a personal platform,
only to leave
Best way to consider this employee is as one more marketing channel - one more
way to get the word out about your company. These mentions and appearances
can lead to increased awareness for your company, which can lead to more sales
Concern most companies have is that the employee is not going to be able to get
their work done, will get an unmanageable ego, or will be recruited by another
company and hired away
The best advice in this scenario is:
Let your employees shine, rather than trying to hide their brilliance. Let them be
the voice and face of your company and let them become rock stars. If they feel
like you’re giving them a chance to be awesome and to spread their wings, they’re
more likely to work harder to earn that trust and belief in what they’re doing. That
can only to bigger and better ideas from them, more exposure for them, and
ultimately, more exposure for your company.
30. The Models of Social Media Management
Decentralised: no one department manages or coordinates the social media
efforts. Each department does its own thing without any guidance or coordinating
clearinghouse. The departments may collaborate with each other
Centralised: Puts one department, like corporate communications, in charge of
managing all social media efforts. Benefit is that the messaging is centralised and
consistent. Downside is that other departments might have a tough time
responding to customers
Hub and Spoke: Means that several cross-functioning teams report to one
centralised position. These teams can be different individuals or business units.
The cental point monitors all the channels and assigns tasks to the appropriate
department or person, who would then respond appropriately.
Multiple hub and spoke: Similar to previous, but used with larger companies and
multinationals with different locations
Holistic: Ultimate TRUST in your employees….means that everyone has the ability
to communicate on social media. No one person is in charge, and everyone has
“the keys to the car.”
32. Hold your Team accountable
As with any other business related undertaking, you need to plan,
coordinate, and measure results:
Clearly define Goals
Come up with measurable objectives
Strategy: create a blueprint or road map…identify your audiences,
where they are online, and the needs you can fill for them. Then
delineate which channels you’ll use, how they will integrate, and
what calls to action or drivers you will push in each one. Map out
a content strategy for the channels you choose and build
milestones in to continually measure and optimise your efforts
Tactics: These are the steps taken to implement the social media
strategy. Specific topics and messages are formulated here into
blog posts, facebook invitations, etc. Basically, these make up your
‘to-do’ lists
33. Social Media Audit
It is imperative to do a social media audit so every organisation
understands what social media their employees use and how
The audit should be repeated regularly because social media is
dynamic
35. Extra-Territoriality
The operation of laws upon persons existing beyond the
limits of the enacting state or nation but who are still
amenable to its laws
36. “The West” has taken the lead on
addressing some of these nascent issues
•SEC already has extensive regulations to prevent various schemes. Since social
media is merely a NEW channel of communication/distribution, the spirit of these
rules applies to social media as well
•If you “Tweet” about a NYSE listed company from anywhere in the World, you
are caught in the US regulatory need and thus need to be aware of regulations in
that jurisdiction
37. FINRA
http://www.finra.org/industry/issues/advertising/p006118
“…Social networking sites such as Facebook, Twitter and
LinkedIn usually have static and interactive content. Static
content like a profile, background or wall information is usually
considered an “advertisement.” Static content is generally
accessible to all visitors and usually remains visible until it is
removed. As with all advertisements and sales literature as
defined, a registered principal for the firm must approve, prior to
use, all static content. Interactive content includes real-time
extemporaneous online discussions with unrelated third parties
such as in a chat room. Chat room or other content posted in an
interactive electronic forum is considered a public appearance.
Similar to extemporaneous discussions by an RR at a public
appearance, interactive content does not require prior principal
approval, but must be supervised
38. Blogs and Bulletin Boards
Blog and bulletin board postings by an RR are typically static communications. As
with all advertisements and sales literature as defined, a registered principal for the
firm must approve all static content. Blogs may also feature interactive content,
where a third party posts a comment in response to the initial blog and then the
blogger responds to the third party comment. Such interactive comments by the
blogger are considered to be public appearances. Similar to extemporaneous
discussions by an RR at a public appearance, the interactive content does not
require prior principal approval, but must comply with the content standards of the
advertising rules and must be supervised by the broker dealer.
Since interactive content in social networking sites and blogs is considered a public
appearance, RRs must follow the same requirements for participating in these
forums as they would if they were speaking in person before a group of
investors. There are no filing requirements, but RRs are accountable under FINRA
rules and the federal securities laws for what they say. Like all public
communications, interactive electronic postings must be fair, balanced and not
misleading.
39. RRs Must Contact their Compliance Department
Firms are responsible for supervising the business-related
activities of RRs including participation in these interactive
forums. The rules apply regardless of whether an RR is in the
office, at home, on a public computer or using a personal device.
Because of the difficulties of supervision and the potential
liabilities from participating in these forums, many firms limit or
prohibit participation in certain on-line media. Accordingly, RRs
who are considering communicating in a social networking site,
chat room, bulletin board or a blog, should contact their
compliance department to determine whether such activities are
permitted and what procedures may apply. Regulatory Notice 11-
39 provides further guidance on accessing social media sites from
personal devices
40. Linking to Third Party Websites
Linking to other sites raises concerns because these
sites may contain misleading or incorrect information.
An RR's web site should not have a link to a site that
he/she knows or has reason to know contains false or
misleading content (see Regulatory Notices 10-
06 and 11-39). RRs should exercise the same care in
choosing links as they would in referring customers to
any outside source of information.
