Corporate Sensitivity and Social Media

Corporate Sensitivity and Social Media

June 11, 2018 Compliance Blog 0

In April this year, the Securities and Exchange Board of India (“SEBI”) indicted a listed company for insider trading[1] (“SEBI Order”). Not a surprising move in itself, till one read on and realised that SEBI used the social media behaviour of some of the officers of the company and certain outsiders and came to the conclusion that they were “connected persons”, a key requirement for imputing that insider trading had actually happened. In recent times, there have been several instances of employees being warned and even terminated by their employers for inappropriate conduct on social media – despite such conduct having happened outside office hours and with people not connected directly with the employer. All these incidents beg the question, have the likes of Facebook, Twitter, Instagram breached the traditional boundaries between professional and personal and if it has, how should businesses deal with this change?

In this article, we will look more closely at some of these recent incidents and try to suggest some basic dos and don’ts for businesses operating in India.

How did we get here?

Today the news is replete with cases in which companies were compelled to take actions against employees and had to tender a public apology for the thoughtless comments of its employees on social media. The increased popularity and dependability on social-media networks have resulted in it being an important conduit of information and significant drivers of human behaviour, therefore requiring businesses to re think their policies and frame new ones to avoid potential risks.

Social Media and the Workplace

The sacking of an employee by a leading Indian Bank due to his controversial post is evidence to the fact that employers are taking active steps than ever before. In this case, the insensitive comment of the bank’s employee pertaining to the heinous crime committed against an eight-year old, invited the fury of the public including some customers, who even threatened to discontinue association with it in case the Bank failed to take action.

The importance associated with social media posts cannot be underestimated anymore, given that in the said SEBI Order, the regulator considered the parties’ social media profiles to impute the occurrence of insider trading. One of the grounds was that the parties were ‘friends’ on social media platform and had ‘liked’ each other’s photos. Solely based on this connection, SEBI has alleged that they classify as “connected persons” as far as insider trading is concerned.

Let’s prevent and prepare rather than repent and repair

Engaging in social media is not a one-off activity and often requires one to assess the risks associated with the same. Posts on social media networks are permanent and cannot be completely retracted even upon deletion, since they allow you to publish posts that can be forwarded endlessly, not to speak of the easily accessible screenshots. Unnecessary hassles can be avoided altogether if employees are inducted about the impact of their social media activity/ behavior.

Here are a few ways in which corporates can ensure guidance to employees during their participation in social media, both personally and in official capacity.

1. Framing a social media policy

Adopting a social media policy is one of the ways to ensure that the employees are made aware of the consequences of their conduct on social networks. It makes lives easier, by taking the first step towards preventing possible legal or security issues.

Businesses must ensure that its employees are given straightforward guidelines that are easy to follow. While laying down etiquette expectations, a business must not overlook employee empowerment. Here are a few pointers to take care of while framing a social media policy:

  • Knowledge of the company’s policies and code of conduct – The policy should encourage employees to be aware of the business’ code of conduct and other policies like Information Protection Policy, Insider Trading Policy etc., so that their virtual behaviour can be responsibly owned.
  • Use sound judgment and common sense – Policies should encourage employees to use common sense and to respect the audience they are addressing in posts. Ethnic slurs, mindless participation in discussions where emotions run high, like religion and politics should be refrained from.
  • Statements on “friending”/ “following” people on social media – While all businesses need not necessarily have a statement in this regard, it might be necessary for some professions like journalists, to frame policies around this issue, since “friending”/ “following” people on social media might lead to a perception of advocating a cause even one is intending to be neutral.
  • Establishing the difference between speaking “about” your business and speaking “on behalf” of your business – Employees must disclose their affiliation with the business and be transparent about independence of opinions expressed on social media networks. There must be an established procedure to distinguish between an employee’s personal use of social media from its use as an official representative.

2. Conducting workshops to train employees and keep them updated as social media evolves. During these workshops, businesses can clarify their expectations around employee’s use of social media. Incorporating views of employees in the policy is also a good step towards ensuring that bases are covered and may ensure better chances of acceptance of the policy among employees.

However, in a bid to protect the business’ reputation, one cannot afford to take complete control and disrespect the rights of its associates to use the social media as a form of self-expression.  The social media policy should avoid discouragements, since it cannot possibly block the use of social media altogether. Instead of focusing on what not to do on social media, the policy can serve as guideline to help keep employees out of disconcerting situations.

Conclusion

While these incidents are relatively new in our country, they have been prevalent in other parts of the world for quite some time now. Governments of New Zealand, Canada among others have framed social media guidelines. In fact, tribunals in the UK[2] are known to have relied on social media policies while ruling in favour of a company for the dismissal of its employee for making inappropriate comments on social media.

India does not yet have a legislation or any guideline to specifically regulate social media behaviour. Therefore, it is imperative for employers to frame a social media policy to balance the need for personal space of employees with the necessity to avoid unpleasantries like the ones we have recently witnessed.

For further queries or clarifications pertaining to framing of social media policies, please feel free to contact us at inquiries@lexplosion.in

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  1. Deep Industries Limited [SEBI/WTM/MPB/IVD/ID–6/162/2018]
  2. Preece v JD Wetherspoons [ET/2104806/10]

The authors:

  • Zaved Akhtar (Manager)
  • Sayan Chatterjee (Manager)
  • Soham Basu (Senior Associate)
  • Sharanya Mukherjee (Legal Associate)

About the author

Lexplosion:

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