Directors & Boards: Think Before You Tweet

Articles / November 4, 2009

New York Office Managing Partner George Stamboulidis and associate Alberto Rodriguez co-authored an article, "Think Before You Tweet: What Every Corporate Executive Should Consider Before Using Twitter," which was published in the November edition of Directors & Boards "E-Briefing."

According to Stamboulidis and Rodriguez, "Companies who have adopted Twitter . . . have been harnessing the power of Twitter to engage customers in a number of different ways—from answering their questions to sending out alerts on products, services, and special offers. These companies literally have thousands of individuals constantly receiving their messages and are, conversely, actively monitoring Twitter for tweets relating to their products and services. . . A bit surprisingly, CEOs and other top corporate executives have also been using Twitter as a means to engage customers, promote their companies, and as a forum for just about any topic of their daily life."

Stamboulidis and Rodriguez illustrate this point using a number of Tweets posted by Richard Branson, Virgin Group Chairman. "As you can see from a selection of Mr. Branson’s tweets, they are infused with everything from business promotion and strategy to his personal style, politics, and humor," state the authors. "Such tweets can make for an entertaining read. From a legal perspective, however, such a mixed bag of messages coming from a top corporate officer raises several issues for a both private and public companies," state Stamboulidis and Rodriguez.

The authors caution that "If not properly monitored, CEOs and other senior officers run the risk of violating insider trading laws by sharing sensitive nonpublic information. Also, disseminating alleged falsehoods or disparaging remarks about competitors could give rise to libel suits, and sending out false or misleading claims may pave the way for fraud actions."

Stamboulidis and Rodriguez go on to provide five basic "Do's and Don'ts" to minimize legal risks posed by tweeting and to maximize Twitter's commercial benefits:

  • Do check your privacy settings
  • Don’t share sensitive non-public information
  • Do read and monitor the terms and conditions of your social networking site
  • Don't use social networking sites to disparage your competition or to spread rumors
  • Do read and comply with your company’s social networking policy