ADVISORY SERVICES. Risk management in an evolving world. Making the case for social media governance. kpmg.com

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1 ADVISORY SERVICES Risk management in an evolving world Making the case for social media governance kpmg.com

2 Risk management in an evolving world 3 Why good governance should be the foundation of your social media strategy. There s no question. Social media is becoming a key element of business strategy. From engaging customers in real time, to adding sales channels, even for enhancing market research, companies are discovering many ways to take advantage of social media. And this is only the beginning. As the evolution continues, innovative organizations will find even more ways to increase the return on their social media investments. But for all its advantages, social media also brings inherent risk. This can include threats to confidential information or intellectual property, reputational risk, and the potential for regulatory infractions, to name a few. As a result, it is imperative that companies implement a clear cut governance strategy as part of their social media investment. And that s where KPMG can help.

3 4 Risk management in an evolving world Your best resource: A well-informed and motivated workforce As the use of social media matures and its potential value grows the need for strong governance will become even more important. This process begins by developing formal social media guidelines and communicating these to your workforce. This will help individuals across the organization recognize their roles and responsibilities with regard to corporate social communications and its potential impact on the company. These guidelines should also take into account personal communications since employees increasingly access the digital universe on personal mobile devices and computers. As a result, the starting point for a strong governance program is the understanding that there is a 24 by 7 by 365 conversation taking place about the organization, and that failure to manage this conversation properly can have a negative impact on reputation and revenue. Help in navigating an evolving social media presence * The speed with which organizations are turning to social media combined with the rapid pace of change in technology make social media a constantly evolving world. Now add the need to maintain regulatory compliance that many companies face and the challenges of managing social media risk become even more complex. KPMG s Advisory Services Group understands the challenges organizations face as they try to navigate a seemingly chaotic environment. What s more, we re able to draw upon more than 100 years of experience in helping organizations across all industry sectors develop effective governance policies to help manage risk. In addition, our social media team understands strategy and policy development, assessment of current governance programs, and the enhancement of Enterprise Risk Management (ERM) programs to incorporate social media data. This enables us to help companies focus on social media through three separate but overlapping lenses: Governance of workforce use of social media, both on and off the company infrastructure Governance of the public-facing voice of the company programs that employ social media for marketing and communications purposes Consideration of how social media monitoring data can inform a company s ERM program and enhance reputational risk management. Using these perspectives, we can help companies identify risk in social media programs and enhance the relationship between the key corporate stakeholders most frequently affected by social media efforts Marketing, IT, HR, Legal, and Compliance. A combined effort in building social media governance between these and other stakeholders will not only help address risk but also strengthen the organization s overall social media strategy. * Certain of the Advisory services described herein are not permissible to KPMG audit clients and their affiliates.

4 Risk management in an evolving world 5 A governance strategy that takes into account your unique challenges KPMG s Advisory Services professionals begin by working with you to understand your views on social media and your strategic objectives. Then, using our knowledge of risk and strategy, we help you develop a tailored governance discipline for managing your social media investment more effectively. Our work with clients to address specific risks within an evolving social media program includes: Strategic advice on implementing social media programs Social media policy/guideline development Assessment and implementation assistance of social media governance Utilization of social media to enhance the customer experience Assessment of agency relationships and structure when social media is outsourced Enhancement of business dashboards through use of social monitoring data Utilization of business insights derived from analysis of social media data, both structured and unstructured What we do at KPMG Advisory KPMG s professionals combine technical, market, and business skills to deliver objective advice and guidance to help the firm s clients grow their businesses, improve their performance, and manage risk more effectively. Audit Audit teams equipped with a high level of technical skills and empowered with professional skepticism provide the heart and soul of a good audit. Tax Through a forward thinking multidisciplinary approach, technical experience, and deep industry knowledge, KPMG s Tax professionals can add value and help organizations manage the tax complexities of an ever-changing business environment.

5 6 Risk management in an evolving world Advantages that help you manage risk. And benefit from opportunity. Harnessing the power of social media can seem like a daunting task, one that presents unique risks to your organization. At the same time, the speed at which Web 2.0 technologies and market demands are evolving presents you with both great opportunity and greater need for governance. KPMG s Advisory practice is eager to help your company build on its strengths in social media while helping to ensure you have a strong foundation of governance a foundation that gives you the ability to: Better understand the opportunities and risks associated with social media Enhance demonstrable controls of social media programs, satisfying both audit and compliance program demands Anticipate emerging regulatory compliance issues that may dictate your social media activities on a global basis Improve key third-party relationships with regard to social media technologies and utilization Gain stronger consensus among internal organizational areas impacted by social media with regard to strategic direction and risk management.

6 Contact us For more information about KPMG s social media services, please contact: Sanjaya Krishna National Practice Leader, Digital Risk Services [email protected] Phillip Lageschulte National Practice Leader, Emerging Technology Risk Services [email protected] H. John Hair Director, Advisory [email protected] ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY KPMG TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (I) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (II) PROMOTING, MARKETING, OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN. KPMG LLP DOES NOT PROVIDE LEGAL SERVICES. The information contained herein is general in nature and based on authorities that are subject to change. Applicability to specific situations is to be determined through consultation with your tax adviser. Due to auditor independence rules, certain aspects of these services may not be permissible for KPMG audit clients or their affiliates 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. Printed in the U.S.A. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. NDPPS