The benefits of turning employees into brand ambassadors are huge for companies. Research has shown that companies with employee advocacy programs in place see measurable increases in brand visibility and recognition, recruitment successes and ultimately an uplift in revenue growth – all at a relatively low cost. As Hearsay CEO Clara Shih states in her new book, The Social Business Imperative:
“The engagement levels on an individual’s pages often outperform those on the brand’s homepage even when the message is identical – it’s a testament to the immense power of one-to-one relationships and local networks and communities.”
Employees also see benefits of engaging in a social media advocacy program. These benefits include boosting their thought leadership by sharing work accomplishments, honing in on their social media skills, giving their connections a glimpse into their workplaces, and being recognized by their firms’ management as loyal team members. And, they are already doing it; a study by Weber Shandwick actually found that 50 percent of the U.S. workforce (about 60 million people) is already voluntarily posting, tweeting and commenting about their employer.
As more and more financial firms roll out social media advocacy programs for their general (non-regulated) employees, legal and regulatory issues still must be taken into account. If employees are communicating company-related information on personal social media accounts, how can the firm balance compliance with its regulatory obligations and the privacy rights of their non-regulated employees?
Interpreting What the Regulators Say
The Securities and Exchange Act (SEC) Rule 17a-4(b) and Financial Industry Regulatory Authority’s (FINRA) Regulatory notice 11-39 require financial firms to retain records of all communications made on electronic/digital mediums that relate to its “business as such,” even if such communications are made by the firm’s non-regulated employees.
Even though neither the SEC or FINRA has specifically defined the term “business as such,” it is safe to say that if non-regulated employees are posting and communicating content that is related to the firm’s products or services, then the firm should keep a record of such content. Additionally, the firm should have oversight on business-related communications on social media, to ensure that its non-regulated employees are staying within brand and on the right side of the law.
Regulating Non-regulated Employees: Challenges
However, monitoring, supervising and keeping records of non-regulated employee communications on social media is not so easy due to various legal implications. Generally, employee advocacy programs rely on leveraging employees’ personal social media accounts to amplify brand-related content. The goal is to make a positive impression on the employee’s friends, families and other personal contacts.
For one, there are legal limitations, such as the federal Electronic Communications Privacy Act and various state laws that began in 2012 – including those enacted in California, Illinois, Texas, Massachusetts and many others – prohibiting or limiting the monitoring and accessing of employee social media accounts by employers. Other countries also enforce privacy laws that prohibit companies’ rights to monitor their employees’ social media activities. Additionally, absent a regulatory requirement, most employees likely would take issue with letting their boss and company see what they do in their personal lives.
There are other conflicting regulations that affect this area. For example, the National Labor Relations Act (NLRA) guarantees the right of employees to organize and engage in concerted activity on social media, including the right to complain about their work conditions. However, firms have an interest in supervising such communications and to keep a record of them to ensure that confidential information is not being divulged. Moreover, such concerted activity could potentially have “business as such” discussions, in which firms are required to supervise and record-keep.
Compliance Considerations and Solutions
Some firms have managed to solve these challenges by only allowing pre-approved content to be published and to keep records of only that content. However, the inability to add their own personal voice to social media posts may be a deterrent for non-regulated employees who do not want to sound so “corporate” to their friends, family and peers. Also, there’s the risk that employees posting the same generic message will end up showing as such in the public sphere.
The key is to have a solution that can balance the regulatory requirements for monitoring and record-keeping business communications while respecting and adhering to privacy rights. This starts with educating all employees on the appropriate way to use social media as a representative of your firm. Train non-regulated employees on the differences between business and personal social media posts, and clearly delineate the boundaries the company has in place for monitoring communications so that they’re assured only communications related to the firm’s products and services will be supervised.
In addition to educating employees on what not to say, some of the most effective employee advocacy programs provide examples of what they should say, including marketing-approved content and incentive programs for driving engagement.
With the right education and process in place, you can truly empower employees, and the enormous benefits of social employee advocacy can be realized for both them and the firm.
Disclaimer: The material available in this article is for informational purposes only and not for the purpose of providing legal advice.