Friday, September 07, 2007

Social Media and Corporate Responsibility


Rough Mind Map - Social Media & Finance Industry Example.

At the start of the week two people were discussing Social Media with me when one mentioned the word "Insurance" - this was what my mind mapped. Take out the finance industry as just one example.

A major area for social media is distance learning. Social media brings learning to life and companies (VISA, RBS, HSBC) in the UK are getting the ifs (and similar institutes) to customize learning products for them:
http://www.ifslearning.com/home/default.cfm
They also have ifsProshare and KnowledgeBank.

Tremendous changes are happening in the finance industry. We'll take this term - finance - to include the accounting and investment fields...because where Corporate Responsibility (CR) auditing is concerned - there will be an overlap in the future: http://www.pwc.com/Extweb/service.nsf/docid/
976C40E302D62DA980256BC1003D7DA7
Reporting that extends to economic, social, and environmental sustainability - below and beyond the "reporting threshold".

PwC are an industry leader in setting the standards for global implementation of IFRS which used to be known as the "International Accounting Standards Board" (IASB). The words "Financial Reporting Standards" have replaced "Accounting Standards Board".

In 2009, the International Financial Reporting Standards is proposing to merge with US GAAP:
http://www.pwc.com/gx/eng/about/svcs/
corporatereporting/WW2_06Convergence.pdf

Differences between IFRS and US GAAP:
http://www.pwc.com/extweb/pwcpublications.nsf/
docid/74d6c09e0a4ee610802569a1003354c88

Consider the impact on large and small business, and on academic institutions teaching financial-related courses. Changes will have to be made. Are preparations being made?
In 2004, when I took Accounting courses at university, no mention was ever made of IFRS in the class. Since global changes in financial regulation and reporting standards are so important -students should be kept in the loop.

In November 2007, Markets in Financial Instruments Directives (MiFID) takes effect extending the responsibility of firms in their conduct of business and internal organization - CR.

The Financial Services Authority (FSA) in the UK have implemented "Treating Customers Fairly" - also CR. And it's the FSA that provide institutes like the ifs with syllabus guidelines, and industry with codes of conduct.

Firms are operating internationally, and so are educational institutes - all are using social media. What's interesting is the dependence we have on social media - especially in distance learning.

As PwC forges ahead to set the standards in global CR for finance - which company should set the global standard for social media? Google? Yahoo? Should marketers be curators of content? What are the conflicts of interest? What protections are in place for profiles and content?

The answers to these questions need to be explored. Our reliance appears to be on marketers as the promoters of social media to answer them. We see division, such as with the Wikimedia Foundation and the Founders of Centiare. Does or should a multi-industry group exist to independently evaluate and answer these questions?

5 comments:

Gregory Kohs said...

As a co-developer of Centiare, I'm delighted to have been mentioned in your blog post. However, I'm confused as to why the multi-layered environment of "social media" needs to have global standards. To make a hasty analogy, wouldn't that be like saying there should be an international committee overseeing the use of "sound" in spoken language? Social media is a loose, far-reaching class of communication venues. How -- maybe more importantly, WHY -- would there be a desire to standardize it?

Fiona Torrance said...

Hi Gregory,

I wrote a comment earlier...so you may get two :-)...it doesn't look as if the firt published.

Thank you for your views, and you're spot on - the social media environment is multi-layered and quite self-regulating creating innovation such as Centiare.

What I'm trying to point out is that we - households and businesses - are becoming dependent on the use of this multi-layered social media environment in all industries.

My illustration is just one of regulation (compliance) in the finance industry where people use online banking, etc. So many financial products are incorporating the use of social media.

Then you have marketers suggesting the possibility of being "curators" of content (and profiles?). Google and Facebook lining up. Then think about partnerships...alliances...recruitment...tools...

Other industries (medical, etc) are regulated too. Do you not see an overlap occuring even though we value social media being "loose" and "far-reaching"? I value this too.

The financial industry expects accountability.

We are asking the same questions. Why should there be a desire to standardize it? Maybe we should ask...will industry eventually expect it?

Fiona Torrance said...

Radio Frequency Idenfication (RFID) and personal privacy are an example in a different sense. Industry professionals started thinking about standards.

Fiona Torrance said...

I've posted a question on David Phillips blog - PwC Corporate Reporting - let's get his viewpoint:

David,
Do you think that industry will eventually expect standards in social media as it impacts their products and services? I've posted a writeup on http://bizblogreview.blogspot.com.

Fiona Torrance said...

I've also emailed three experts at USC Center for Telecom Management (CTM) for their views, and Eric Kitz of HP. Let's get some insights...

USC Center for Telecom Management:
http://www.marshall.usc.edu/web/CTM.cfm?doc_id=787
Institute for Critical Information Infrastructure Protection:
http://www.marshall.usc.edu/web/CTM.cfm?doc_id=787