Risky Business – Social Media

A topic which is both quite interesting and at the same time extremely important when it comes down to the mitigation of reputation risk for an organisation.


In recent years social networking law has expanded as fast as the technology itself. Website owners now have a serious duty of care to its users across all platforms.

Websites such as Twitter, Linkedin and Facebook are all accompanied by disclosure obligations for all types of industries, organisations and services.

A large reason for these disclosure obligations is a companies reputation risk. As stated by Malcom Burrows from Dundas Lawyers in his article about the ‘Legal risks of social networking for business‘ the most imperative risk to minimise in a social media environment is reputation risk. The intangible loss of reputation can significantly damage a hard earned brand in a very short time.

How can one prevent these risks?

  • Block social media sites that are not part of employee tasks
  • Introducing comprehensive social media policy to provide guidance to employees
  • Engaging a social media reputation monitoring service
  • Having a system in place to respond to complaints on forums sites and fan pages
  • Having a documented social media strategy in place
  • Preparing a crisis management plan to deal with a social media crisis

A great case study is what happened to Nestle over their dispute with Greenpeace. Greenpeace accused Nestle of “threatening the livelihoods of local people and pushing orangutans towards extinction”, due to their involvement with palm oil companies that are trashing Indonesian rainforests.


A rather gruesome video was uploaded as part of Greenpeace’s campaign, Nestle lobbied to remove it from YouTube citing copyright infringement. This wasn’t the greatest PR move and only caused more controversy and conflict.

Round 2 of the campaign took place over Facebook. Complaints and opinions were voiced directly onto the Nestle Facebook page.


Unfortunately for Nestle the administrator of the page retaliated with rude and sarcastic comments which only made the situation worse. Nestle had to eventually back pedal and apologies on behalf of the admin.

Nestle ended the contract with the palm oil company and the admins comments became a famous example of how not to engage with customer complaints.

Bridget Carey of the Miami Herald sums up the lesson of all of this pretty well:

“If you can’t say anything nice, don’t say anything at all… Companies can learn something from this moment… Companies use social media to present a voice. When people are screaming at you, it’s best not to scream back.”

Moral of the story, be careful what you say online! Reputation is everything.


11 thoughts on “Risky Business – Social Media

  1. Hi, Sean, good case study! I would like to know what did the Nestle admin say to upset more people. And if they had any sort of SMP to prevent this sort of replies from Nestle employee; i.e. Is the admin’s action violating protocol in the first place? Having a system or a team of professional working in the social media sector is unquestionably beneficial for companies nowadays. One good case study for preventing social media crisis and actually gain good reputation is the Woolworths ‘fresh donut’ case. If you are interested, here’s a link: http://www.smartcompany.com.au/information-technology/054379-woolworths-social-media-success-five-lessons-from-the-billboard-scandal-2.html

    • Hi Royce, thank you! I would like to know too…I looked at a tonne of sources and no one has seemed to save the comments from the admin. I’m guessing they were taken down pretty quickly before it could be used against them. I suppose social media was really in its infancy stages when this particular incident occured. So the idea of an SMP for Nestle’s employees may have not existed. Althought I’m sure it does now haha! Thanks for sharing the link, looks like Woolworths knows what they’re doing!

      • Yeah good metaphor. Just as infants do funny things, some of these case studies actually gives a good laugh.
        Too bad there is no record of the admin’s comments now. Rule of thumb: “Always ‘Ctrl+Prt Scr’ first when you see sth funny.”

  2. Hi there! A really nice post about a particular case study. But i do want to disagree with you in some part.
    Even though blocking social media sites that are not part of employee’s tasks is a good idea to prevent these risks from happening, i think that it is quite has a double sided effect. Just imagine if you are working in a company and your company blocks all those social media sites such as Facebook or twitter. Sure, you will be more productive for the company and the company will certainly be more happy with you, but you will be quite annoyed or be some sort of “forced” to do your work. Although it kind of depends on what kind of person are you, but i believe most people will quite react that way.

    • Hey mate, thanks for your comment! I would actually agree with you here, that was one of the points from the Dundas Lawyers articles which I don’t support personally. From a managers perspective I can see the benefits of just cutting off social media, however in terms of keeping employees happy it would make the company quite an unnattractive place to work. There has to be a middle ground 🙂

  3. Hey man. I am a really big fan of this post, not only because the mention of Kit Kat’s (which is so delicious :)) but also to show how social media interaction can go wrong. I mean when I think of business (especially something so large as nestle) I think professionalism, and rude, sarcastic Facebook replies tend to destroy those notions of professionalism, quickly. It’s at least good to see that the company apologized for its admins actions, makes everyone feel a little better.

    In regards to the Greenpeace Youtube commercial, I agree with you hugely that it is quite gruesome! However I can see exactly why Nestle filed a copyright order. I mean seriously while that video is controversial (great for gaining attention) its defiantly out of order. The image of the gorillas fingers inside the KitKat wrapper damages the Nestle image hugely, possibly even violating legislation regarding defamation, I mean after all Nestle aren’t in fact causing harm to the gorilla’s they are simple trading commodities with a company that is doing so. What are your thoughts on my idea?

    Its also good too see that Nestle stop dealing with those rain forest destroyers!

    • Hey mate, thanks a lot for your feedback. Exactly, SMP’s need to be implace as soon as possible to ensure these types of things don’t happen. Professionalism and reputation online is everything. I think Greenpeace went way too far with the video and completely agree with you. Nestle is indirectly involved with deforestation and the impact it is having on the wildlife. I guess it’s just easier to target a big name brand rather than the palm tree oil company to gain publicity about what’s happening. Like you said, the controversial nature of the video was great for gaining attention, and that’s all Greenpeace do (attract attention to a problem). I suppose it was too hard for the admin to resist commenting back and expressing his opinions. I guess we will never know the full extent of the situation, but definitely a great example of the importance of social media policy in the workplace.

  4. Hi Sean, Nice Blog! Social media played an important role lately in communicate people with each others, at any time and place around the world. But instead of using this technology correctly. unfortunately people start using this technology for damaging people reputation. I also agree with you in regard to, how social media impacted the reputation of other companies such as what you mentioned in your Blog about Nestle firm.

    Thanks 🙂

    • Hi Hasan, thanks for your comment! You’re right, with the positives come the negatives. The ability to get a message across in such a short period of time is a huge draw card for activists when coming to protesting online through social media. The Nestle case is a great example of how it’s worked to Greenpeaces favour.

  5. Great post Sean. It’s pretty scary how much power the people have in this day and age. But keeping quiet in face of an attack, in my humble opinion, wouldn’t be the wisest thing to do. I think that should there be any occurrences of a backlash, the company should, quickly respond and contain the situation.

    • Hi Julian, would have to agree with you there. It’s definitely important to show your followers that you have nothing to hide, and if you do, to openly apologise to rectify the situation as quickly as possible. Definitely an issue that is becoming more and more prominent to companies dealing with complaints online in the public arena!

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