PwC's David Phillips response to Social Media and CR

On 3 Sept 07, I asked David Phillips, PwC's senior corporate reporting leader in Assurance Practice, a question on the PwC corporate reporting blog:

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.

David's response:
Fiona, I think you pose an interesting question. I think the promotion of products and services through the social media is at an early stage of its evolution, as is normally the case industry and society are happy for it to evolve as no one has been badly damaged. As with most things I am sure a point will come when industry may try to impose some form of standards (clearly at the moment some companies impose their own standards for accreditation) to ensure that individuals are not mislead and damaged by the irresponsible actions of a few.

USC CTM Response on Social Media and CR

"I don’t think you will see, nor would it be a good development, standards for structure, content of social media. However, security issues, which is the one that triggered your original question, will most definitely generate demand for standards. Whether those turn out to be industry proposed, which is what is happening in finance industry when it comes to cyber security, or government imposed, which some in Congress argue for, or imposed through third parties such as auditing community remains to be seen. CTM’s sister institute, ICIIP (Institute for Critical Information Infrastructure Protection) has developed one model for such standards, Systemic Security Management, which is being actively reviewed by one of the leading international auditing communities."
Morley

Morley Winograd
Executive Director

USC Marshall
Center for Telecom Management (CTM)

Biography:

Morley Winograd is an internationally recognized authority on the impact of technology on life and work. Prior to joining CTM, he served as Vice President Gore's Senior Policy Advisor in the National Partnership for Reinventing Government. Since then, governments in Italy, Mexico, Israel, Costa Rica, and Argentina have asked him to help with their own reform efforts.

His lectures on the topic of technology's reshaping of America have won wide praise in forums as diverse as the Commonwealth Club of San Francisco, Los Angeles' Town Hall, Harvard's JFK School of Government, and Bologna University's John Hopkins School of International Affairs.

Prior to his work in government, Winograd spent eighteen years with AT&T, retiring as a Regional Vice President for Commercial Markets, having previously served as President of AT&T's University of Sales Excellence, a two-campus corporate training center that he reshaped into a university environment.

Morley is co-author of Taking Control: Politics in the Information Age (Holt, 1996). His innovative approach to corporate training has been recognized in such management training books as Stewardship, by Peter Block, and The Monster Under the Bed, by Stan Davis and Jim Botkin.

Source: http://www.marshall.usc.edu/web/CTM.cfm?doc_id=3979

Social Media & CR Example Continued...

I'll give you two personal examples, and they're just two in that multi-layered spectrum of the universe termed "social media":

1. My ISP is BT and they're teamed up with Yahoo! who provide me with an email service too. I have the Option 3 package for broadband - full bells and whistles unlimited - with firewall, virus and spyware protection...all that stuff.

While in the US I setup a Yahoo.com email account and I've continued to use that for personal US friends, etc. For UK purposes, I use the BT Internet Yahoo! account. There is also a Europe one which includes UK to my knowlege but I can't login through that with my BT Internet Yahoo! one.

When I'm using Yahoo.com and login to email...this is so called "personal communication", BT Internet slice in the middle of my email with a pop-up (even though I disable the pop-ups?) informing me that I have a BT Internet Yahoo! email account. Well, don't I already know that? And, do I want to be informed in the middle of an email just because BT have teamed up with Yahoo!?

It's all about marketing.

2. What I've also experienced while paying a student loan online with an international finance institution is that "in the middle of the transaction", a pop-up appears for another finance institution trying to sell me a loan product (?). What's going on?

3. I've always used Google as my default homepage. Well, Microsoft have apparently tried to take dominion a number of times because Google have warned me...another pop-up saying something to the effect that Google has blocked Microsoft from changing my default settings. Do I want to know all this?

It's all marketing, advertising and competition - using social media as a form of "predatorship". We all know it exists, but when it extends to financial products and online capabilities - shouldn't we ask questions?

Who do we ask...the ISP (in this case BT)...Yahoo!...the creators of the IT & infrastructures...the marketers advising these firms...who?

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?