Social media is here to stay. Even if your business has never had a presence on a social media network, it is important that you understand how it works and its potential affects on your business. With over 750 million recognised users on Facebook, 150 million registered users on LinkedIn and 100 million active users on Twitter, social media leads the charge in allowing the uploading and creation of user generated content. Millions of users and online communities foster interaction and online conversation. And establishing social media policies or guidelines is necessary in building a presence online. Even in your own office or business, you should have a risk management strategy addressing the use of social media by your staff. This article looks at three broad categories where social media use can affect your business.

Maintaining a Business’ Social Media Presence

If your business has an online presence through social media, you need to have someone responsible for managing the content. It is important to plan a social media presence and establish responsible social media communication. A social media governance strategy is also recommended for medium to larger businesses, whereby an in-house legal or corporate communications team monitors and responds to the interaction generated through social media networks.

In the United States, a publicly listed clothing company called Francesca Holdings was in hot water after its CFO shared thoughts on social media about his company’s financial position before it was available to the market: “Roadshow completed. Sold $275 million of secondary shares. Earned my pay this week.” “Board meeting. Good numbers=Happy Board.” These communications were deemed to be inappropriate communications of company information, and he was terminated shortly after. 

Protecting Your Business Reputation From Attacks

Social media can build brand loyalty and allow your business to more easily connect with its customers and clients. However, it can also pose a significant reputational risk when something goes wrong. Watch out for three common types of attacks that could be made on social media:

  • Trolling: Individuals who post offensive, defamatory or inappropriate content to provoke a reaction from those who read it. They deliberately engage to harass or discredit others.
  • Astroturfing: Mass support or disapproval for a cause or product, disguised to be from multiple genuine online identities. This can amount to misleading and deceptive conduct under the Australian Consumer Law.
  • Sock Puppets: Individuals with fake identities to deceive the reader into thinking they are genuine supporters of a product or service.

Employee Use of Social Media

Use of social media networks by employees raises some potential issues. Using social media during work hours, potential workplace harassment and potential disclosing of confidential information may all arise – it is important to have a social media policy in place for your employees. In addition to an Employee Handbook, a social media policy should also be included that sets out ground rules for employees concerning use during and outside work hours.


The law is still evolving in the area of social media. Your business can easily set clear guidelines and policies on social media use. Our online business lawyers and employment lawyers have drafted a number of social media policies and employee handbooks. Contact LegalVision through the web form on this page or call us on 1300 544 755 to discuss any questions you may have about social media and your business.

Anthony Lieu
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