Traditional risk management policies and procedures were not designed for, quite literally, minute-by-minute monitoring of social media chatter to identify brand, strategy, compliance, legal and market risks.
Those risks are considerable. Financial institutions have had to shut down social media forums due to unanticipated negative feedback; the stock markets have been buffeted by fraudulent social network postings; businesses have had to change or rescind strategies in response to the force of social media; other businesses have suffered brand damage due to the power of social media to send negative impressions almost instantly around the world.
This Accenture paper acknowledges the power and importance of social media to businesses in every industry. At the same time, it helps identify and explore many of the potential negative consequences posed by social media in terms of brand, strategy, regulatory, legal and market risks. More important, it outlines a holistic approach to identifying, assessing and managing those risks.
Our focus is on distinctive responses— policies, procedures, technologies and competencies—across traditional risk management categories of governance, processes and information technology.
Especially important is the human dimension—creating a risk culture that is attuned to both the significant benefits and the distinctive risks of social media, and putting in place the compliance and performance management capabilities that can lead to changed behaviors in social media usage.
We augment these discussions of methods and best practices with practical advice from risk professionals.
Authors: Jonathan Narveson, Rafael Gomes, Steve Culp
Source: Outlook Journal (Accenture)
Subject: Risk Management