Before social media was part of daily life for many people, I was engaged by KPMG to research and write a report on the training and education of Australian board members.
After conducting a series of interviews, I concluded that board members believed they only needed to attend courses on corporate governance and related topics if they weren’t “experienced” in the boardroom.
The interviewees – all prominent company directors serving on boards of listed companies as well as significant non-profits - considered the content of most courses to be too “low level” to be of any assistance to experienced board members. Consequently, they were more likely to be guest speakers at such courses, rather than participants, they said.
Their time would be better spent reading and talking to peers and management rather than attending formal courses. Of the sources of information on which they most relied was the Australian business bible, The Australian Financial Review (AFR).
Fast forward a decade and I wonder how many directors today think the same way? Is the AFR – or its equivalent in other countries - still regarded as the best source of business information for the company director?
There is a plethora of information available online but how many company directors are comfortable sourcing it? Many tell me: “I’m on Linked In but I hardly ever check it because I don’t have the time.” One director said that in order to maximise the time she spends with her children, she severely restricts her usage of her computer. She relies on the weekly media updates she’s sent by her companies; she also reads the AFR.
Yet social media forums such as specialist discussion groups on Linked In provide directors with a network of peers and specialist advisors with whom they might not otherwise engage, let alone meet. Some of the world’s biggest brands have a Facebook page. The chairman of an ASX20 company may not feel the need to tweet but all directors should understand the power of Twitter.
Social media is the way many people choose to engage with the world – people who are a company’s shareholders, stakeholders, employees and customers. These new ways of receiving and disseminating material shouldn't be ignored.
A quick peruse of a selection of "favorite" websites - including overseas business newspapers - as well as logging in to Facebook and Linked In is exactly the same as opening the AFR over breakfast, turning on the radio to listen the the ABC, or watching the late SBS news of an evening. It's a habit and it's part of staying in touch with how the world is thinking.
As an experienced director - and a presenter at courses - I believe that I can always learn more from attending a course as a participant. I will, I hope, never cease learning from others. As to social media, I confess I did not know what it meant when I first attended a session on it. My ignorance has been improved by attending courses, and talking to people. The power of social media cannot be ignored. As a director, I don't want my first understanding of it to occur during a company crisis.
ReplyDeleteUnfortunately, there are already cases of boards risking their companies' reputations because of directors' lack of understanding about social media.
ReplyDeleteOne example is French hypermarket chain, Carrefours.
A couple had taken their autistic son to the Carrefours Assago store near Milan to have photographs taken with characters from the Disney Cars movie. When the boy didn’t respond to the photographer as quickly as the other children, a Carrefours representative was reported as saying, “But he’s not normal, why do you take him among the people?”.
The couple blogged about the incident, attracting hundreds of comments. Carrefours was forced into an apology – a month later.
As one reader commented: “This story tells us … about the potential impact of blogs on corporate brands. But not only as a threat. If the issue is correctly managed then the response can get the same kind of exposure….”.
The board's failure to appreciate the power of social media meant the company suffered extensive brand damage that it should have been able to contain.