The world gasped when unwise tweets from Elon Musk cost his company and shareholders billions of dollars. Yet CEO failure to engage online is also a risk to reputation and diminishes capacity to manage issues and crises.
It’s very easy to focus on occasions when social media goes feral – Like when Musk posted a tweet suggesting that one of the Thailand cave rescuers was a pedophile, and Tesla shares fell by over $2 billion. Or how he falsely tweeted that he had financing to take the company private. When the SEC filed a lawsuit, Tesla shares lost more than $7 billion in value, and Musk and the company each agreed to pay $20 million to resolve the case.
Although such high-profile social media fails typically grab the headlines, a Hootsuite survey shows nearly 86 percent of executives in Australia, New Zealand and Asia believe having a social CEO is positive for a company’s reputation, and 76 per cent believe it enhances credibility in the market. Moreover, the vast majority say a social leader has a positive impact on business results.
At the same time, the survey reported that three out of four consumers say a CEO’s presence on social makes a brand more trustworthy, and companies with CEOs active on social media are perceived 23 per cent more positively than companies with inactive CEOs.
However, despite everything that’s been written about the positive value of social media, research shows most top executives are still failing to engage online.
An American report last year showed that just half of CEOs in top US public companies have a presence on public social networks (beyond the company website) while only 38 per cent had posted on any of their platforms within the past 12 months. A mere 22 per cent had engaged with other people online within the past year.
In the Asia-Pacific region the numbers are equally disturbing. The Hootsuite survey said 34 per cent of listed company CEOs in Australia and New Zealand have no public social media presence at all, and only 10 per cent are active on social media. And 47 per cent of ASEAN CEOs have no social media presence at all, while only 10 per cent are active. Most worrying is that low participation persists in the face of overwhelming evidence about the importance of social media and the terrible cost of getting it wrong.
Any CEO who still doubts the impact of social media should pause to reflect on the case of Lockheed Martin, whose share value fell by nearly $4 billion after a single tweet by President-elect Donald Trump scolded the plane-maker for “out of control” costs. In his book The 4 Billion Dollar Tweet author Ryan Holmes commented that the company leadership was “conspicuously silent on social media, unwilling or unable to reassure shareholders or respond.”
While most incidents are not so dramatic, too many organisations remain at risk from CEO incompetence on social media, or from lack of executive social media presence, especially in the face of a crisis or major issue. Not surprisingly, around 70 per cent of unsocial CEOs worry about the perceived risk of participation. Barriers typically cited include lack of time; competing priorities; lack of expertise; uncertainty caused by past failures; lack of evidence of return on investment; or legal discouragement.
All of these concerns can and should be addressed, because compared to the risk of social media participation, the risk of non-participation can be an even greater threat. As Weber Shandwick boss Andy Polansky says: “Being a social CEO has gone from reputational advantage to reputational must.”