Social Media: Business Risk Considerations

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 1

Social Media Revolution 2013

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2

Social Media: Business Risk Considerations

Last year we visited this topic looking at the foundational concepts

businesses should consider relative to social media risk

management. During this short session we will look at

developments in this evolving area since last year’s conference.

• Developments in privacy and other laws and social media

• Developing practices and lessons learned in creating and

implementing organizational policies related to social media

• Resources for continued learning about social media

• Have fun!

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 3

The Risks of Social Media

•Intellectual Property/Sensitive Data –

• “I’m working on this awesome project!”

•Compliance Violations

• “Look who just walked into the emergency room!”

•Reputational Loss

• “Look what their employees do in the bathroom!”

•Financial Loss

• “Get ready for the stock to tank with the dumb idea these guys have!”

•Safety Loss

• “Free at last! The execs are off to their retreat in Scottsdale!”

•Personal Reputational Loss

• “OMG, can’t believe how much these CEOs drank last night!”

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 4

Salient Points from Last Year: Social Media and

Risks to Business

• Risk arise internal and external to our organizations

• Consider employment and human resource implications

• Consider other legal implications such as privacy laws

• Cross pollinate social media policies across the organization

• Monitor and join the conversation or miss what is said about your business

• Company brand and employee images multiply exponentially

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 5

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 6

Big Social Media Case in Past Year

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 7

Burger King Twitter Account Hacked

Twitter reacted with its usual 140 character McBites of snappy

commentary, turning a whopper of a social media oopsie turned into

tasty treat of entertainment — unless you work for Burger King.

“Somebody needs to tell Burgerking that 'whopper123' isn't a secure”

“Is the Hamburglar behind this?”

“This is why Burger King should use 2 sauce authentication.”

“BREAKING: CIA refuses to comment on allegations Ronald McDonald has

been McFlurry-boarded for intel on Burger King attack”

“If we’ve learned anything from the @BurgerKing hacking, it’s that Social

Media Managers sleep in on holidays.”

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 8

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 9

Exponential Growth and Commercialization

United Breaks Guitars – YouTube

Sweet Brown

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 10

Cross Pollinated Through Organization

• Technology

• Security

• Intellectual Property issues

• Human Resources

• Recruiting and Firing

• Legal

• Privacy law changes, Request social media in e-

Discovery, Copyright issues vs. Fair Use

• Marketing and Communications

• Designated team, decide what gets responded to

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 11

Facebook Firings

• Computer Tech at Cinema School. Kids set up profile for 16 year old

Sarah Archer.

• NFL Referee wearing New Orleans Saints apparel posted on his

Facebook. Drew 73 “Likes” plus comments like, “That’s awesome you

get to be an official for a Saints game! I didn’t think they would let you

since your from Louisiana.

• Public defender posted a picture of her clients underwear! Also

posted a comment alluding to calling into question the client’s

innocence.

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 12

Top Tips for Social Media Policy

Development

•Pick one audience

• Choose an employee who uses social media and write to them

•Refer to other organizational policies but don’t cover everything

•Don’t try to cover all mediums

• Twitter, blogs, Facebook, Pinterest

•Give more Do’s than Don’ts

• Privacy settings, honest statements, share content

•Borrow from those that are successful

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 13

Social Media Policy Guidelines for Employees

• Understand what is personal vs. business and

state when it’s personal

• Be yourself

• No impersonations

• Build your brand

• Keep a secret!

•Admit your mistakes

•Give credit where it is due

•Stick to what you know

•Consider what Mom would think

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 14

Social Media – Other Considerations

• Disclaimers

• Views are my own, not that of my employer

• Employee productivity

• Facebook + March Madness + Twitter + Pinterest = 12 minutes of work

• SEC “Unliked”

• Financial advisors advised not to “Like” posts

• Social Networking Online Protection Act

• Restrict employers from asking for passwords

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 15

Friend and Follow

Websites to watch:

Socialfish.org

FacebookFirings.com

Join LinkedIn groups:

Society of Corporate Compliance and Ethics

Follow on Twitter:

@complianceweek

Friend on Facebook:

Non-profits

Your kids

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 16

Resources on the Internet and Example

Policies

• Social Media Governance Policy Database

• 10 Must Haves for Your Social Media Policy

• Opposites Attract: Corporate Social Media Guidelines

• Edelman Online Behavior Policies and Procedures

•Companies with good policies

• Intel

• IBM

• Mayo Clinic

• Easter Seals

• Ford Motor Company

• Kodak

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 17

Resources for Continued Learning

Resources:

• The Social Media Revolution: A Legal Handbook 2nd

Edition by Mayer Brown law firm

• Auditing Social Media: A Governance and Risk Guide by

Peter R. Scott and J. Mike Jacka

• SEC National Examination Risk Alert – Investment Adviser

Use of Social Media

• United States v. Cotterman – 82 page briefing

• Social Networking Online Protection Act

© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 18

Thank you

Nancy Pasternack

KPMG Forensic

npasternack@kpmg.com

512-417-7705

@MsNPast

© 2011 KPMG LLP, a Delaware limited liability partnership and

the U.S. member firm of the KPMG network of independent

member firms affiliated with KPMG International Cooperative

(“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name, logo and “cutting through complexity” are

registered trademarks or trademarks of KPMG International.