As social media marketing continues to grow, companies are leveraging the power of
social media to advance their business. Not only it helps to build relationships with
customers and connect with guests and partners; it also connects the general public,
in terms of companies’ public image and how they portray themselves online.
Meanwhile, uncertainty of contemporary regulatory guidelines and requirements
are emerging which exposes companies to even greater risk. This makes policies and
internal controls on social media use the vital parts of any company’s compliance
In August 2018, Tesla’s chairman Elon Musk tweeted out that he had secured
funding to take Tesla private at US$420 per share. This later turned out to be a
marijuana-inspired joke he had made to amuse his girlfriend. Sadly, the United
States’ Securities and Exchange Commission (SEC) didn’t find this funny. It promptly
filed charges in September against Musk for securities fraud and distributing
misleading information. As we could see, the law would not tolerate any form of
false disclosure, not even a joke. If you said something that is not true about your
company or misleading, legal liabilities would come after you and that’s why we
need policies to ensure companies wouldn’t cross the line.
A social media governance policy would therefore be ideal to mitigate the risks to
use these online platforms by controlling information disclosure. By having a
complete management guidance and internal control system, one should set a well-
defined procedure with respect to who could disclose information and what
information to disclose. It is also important to educate team members not to spread
rumors about the company and update them on a regular basis about any change
in Hong Kong’s regulations.