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Reputational Risk in the Age of Social Media
Here’s a scenario: a candidate doesn’t get nominated for a seat on the board of an association. The nomination committee makes the decision based on the candidate’s lack of qualifications, but the spurned individual ascribes other motives. The candidate believes he or she was passed over for political or personal reasons — or perhaps outright bias. The person posts the grievances on social media and calls out the board for the perceived injustice. The reasoning may be false, but the allegations result in fracturing the membership and loss of confidence in the board.

This is called reputational risk and it’s become an even greater threat to associations in the age of social media, where members have a platform to embarrass the organization when they don't like an action or decision of its leadership. Allegations — true or not — can be made public instantaneously and spread to thousands of people, damaging the reputation of the organization. In extreme cases, the board or individual board members could be cast as racist, sexist, or some other harmful depiction. While it may not be true, the damage is done and the association must defend itself and repair its reputation or risk losing members, sponsorship dollars, event attendance, influence, or more.

Be Respectful

It may be impossible to completely avoid this type of scenario, but the risk can be mitigated, explains Paula Goedert, partner at the law firm Barnes and Thornburg. In the case of the rejected candidate, the board should reach out to the person in advance to thoroughly explain in a respectful manner the reasoning, says Goedert. Even if the person objects, the grievance is aired to the board members and is hashed out in-house and not to the general public through social media. Always remain respectful and do not give cause to make matters worse.

Another scenario could involve members who feel mistreated or slighted. “Many members believe that associations should be the police, judge, and jury when it comes to the behavior of other members,” says Goedert. “So, they ask the association to step in and provide redress.” Even if this is a request beyond its purview, the board should reach out to the disgruntled members and address these concerns before the grievances go viral. “It can put the board in a position where it is backpedaling to claim that their inaction doesn’t make them culpable,” says Goedert. In such cases it’s not the decision, but how it’s communicated. “Board members need to be more mindful of how they communicate and more respectful in their treatment of issues, knowing in advance that any member can take you to task on social media.”

Think Like a Lawyer

The other part of it involves being more thorough in decision-making and thinking through all the possible consequences. In short, says Goedert, board members have to think like lawyers. “Lawyers are always considering all the bad things that can happen in any given scenario. Boards don’t like to think that way and indeed when lawyers start raising questions, board members often push back. But it’s the job of the board to consider negative possibilities. What could go wrong? How would that decision hurt us, not only fiscally, but how would it hurt our reputation?” It can be helpful to appoint a staff member to present all the possible consequences of a major agenda item for discussion by the board as the staff may have their ear to the ground on issues that may bubble up and has the resources to address them.

In some cases, the decision is fairly straight forward. Say the board decides to cancel a meeting in Florida because there is a threat of a hurricane. Some members may be upset that the decision was rash and unwarranted, but the risk to the association’s reputation would be far greater if they held the meeting and the hurricane did in fact hit. In other cases, it’s more complex. Perhaps it’s related to launching a new program or initiative. What if it fails and loses money? How will that affect the association? Could it lead to bad publicity or negative feelings among members who are upset with higher dues as a result of the revenue loss? “Boards sometimes think it's their job to push the envelope and get out ahead of the membership and lead them to where they should be,” says Goedert. “But they need to be thinking: What if the new endeavor fails? Will it hurt the reputation of the organization?”

“Ultimately, every board member has to know that their first job is to protect the association and make sure actions or decisions don't damage the good name and goodwill of the organization,” says Goedert. “It's really a matter of culture. It has to be the mindset of a board.”
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SEPTEMBER 2019 EDITION
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Board Forward is published 10 times a year by SmithBucklin, the association management and services company more organizations turn to than any other. SmithBucklin has served volunteer board members for 70 years.

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