Risk View

Top Ten Social Media Risks For Business

April 2, 2012 Posted by Peter Moore No Comments

Social media is changing the way business is done, and it is a global phenomenon.  Consider the following facts*:

  • – 1 in every 4.5 minutes online is spent on social media
  • – 1 in every 8 people in the world has a Facebook account
  • – The internet now has more people age 35+ using it than those below 35
  • – 45% of employers screen social media sites
  • – 35% reported they found content on Social Media that caused them not to hire candidates


Many business executives do not understand the risks of social media, both upside opportunities and potential threats with this medium.  Risk Point has identified 25 key risks with Social Media, of which the Top Ten are listed in this Risk View:

RISKS (Threats)

  1. 1. Failure to engage in social media and resultant loss of opportunities
  2. 2. Failure to engage in social media and the resultant loss of relevance in the market
  3. 3. Engaging in social media with inadequate policy and strategy resulting in reputation and brand damage
  4. 4. Loss or theft of company information by employees using social media
  5. 5. Poor or inappropriate “conversations” leading to stakeholder disengagement
  6. 6. Breach of privacy laws by inappropriate use of social media by staff
  7. 7. Litigation arising from inappropriate use of corporate social media by staff
  8. 8. Staff disengagement due to lack of corporate social media strategy or positioning
  9. 9. IT security issues
  10. 10. Loss of productivity in the workplace due to excessive personal use of social media by employees


The risks associated with failure to engage in social media will increase over time as competitors, staff and other stakeholders to the business engage and come to expect that their customers and suppliers are also engaged in social media.  Consider the internet twenty years ago.  The early adopters started using email and developing online presence through web sites and blogs.  Many companies in the 1990’s did not value the importance of having a web site to showcase their business online and engage with potential customers.  How many businesses in 2012 do not have a web site or use email? – None.  Social media is a further application of the enabling technology, the internet.

The risks of engaging without a sound strategy and policy position are different from those of not engaging in social media.  There have been many examples of poor use of social media and subsequent brand and reputation damage including: McDonalds, Fedex, Qantas, Nestle and many others.  There is no question that social media does require adequate focus and resourcing within the business.  Failure to listen carefully, talk appropriately, respond to threats in a timely manner and respond to opportunities will cause commercial damage to the business.  Failure to support staff and employees to engage in and use social media appropriately has probably the largest potential threat to the organization.

BENEFITS (Opportunities)

Social media can deliver many opportunities for businesses including learning from customer sentiment and adapting business to their wants and needs.  Social media also allows us to “listen” to the market, understand what competitors are doing and engaging with potential customers.  Social media is a window to relevance and the ability to compete for the future, today.


By understanding the risks associated with social media, businesses can leverage their position in the market place and improve customer service and staff recruitment and retention.  Failure to engage or engage appropriately with sound business rules can spell disaster for a company.  Understand your social media risks and develop appropriate strategies, polices and procedures to obtain the benefits of this wave and manage downside threats.






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