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We surveyed 171 directors about the impact of social media on boards and directors.
Respondents ranged in age between 38 and 76, and the average age was 59. Half the respondents were less than 60 years of age, and half were 60 or older.
In our interviews with directors in the spring and summer of 2013, we used the following definition for social media:
Social media has dramatically transformed the way we communicate, and this transformation continues to have a major impact on the business community. Information, opinion, images and video are disseminated widely at a rapid pace, and transcend typical organizational structures.
Like it or not, social media is impacting all kinds of organizations and their boards. Some of the impacts are unimaginable to people who are not deeply steeped in the practices of social media.
We developed an interest in this topic because directors expressed a keen curiosity in social media. Most weren’t particularly comfortable with their understanding of the topic nor were they clear about what the implications of social media were for their boards and their own performance on those boards.
With this survey, we strove to find out if Mr. Renjen’s perspective is shared among directors on Canadian boards. We wanted to know how directors are currently reacting to the modern social media culture, and how they anticipate this issue will impact their boards in the future. Our most compelling finding was that three out of four directors believe social media will have a significant or extremely significant impact on their boards in three to five years; yet, just over a quarter believe they can provide meaningful oversight on this topic. Closing the gap, either through director education and/or selective recruitment is essential to remaining competitive and relevant in today’s and tomorrow’s business environment.
Directors’ Understanding of Social Media
Most of the directors we interviewed approached social media with real interest and curiosity, but not with a great deal of confidence. Nearly everyone surveyed indicated that they want to know more about social media; it is on their minds, but few have any depth of knowledge on the subject. They want to know how it can most effectively be applied to both their personal and professional lives. There were, however, a few directors who dismissed social media as irrelevant for them personally and for their industry and company.
The majority of directors either never use or infrequently use the major social media sites. Everyone was familiar with social media giants like Facebook, YouTube and Twitter, but only few directors regularly use any of these platforms. The charts to the left illustrate how infrequently directors use the major social media sites.
Although directors do not need to be active on social media in order to understand it enough for effective oversight, it does appear that the lack of personal use of social media has bred a lack of confidence in the subject. For some, there is such an aversion to being “out there” personally that they completely dismiss any relevance of social media to their board oversight responsibilities. There are wildly different levels of social media understanding, but at the same time, a real interest in how it applies to directors and boards. Typical comments by directors included: I know roughly what social media is but I get a knot in my stomach when it is mentioned. I feel I just don’t have the grasp and understanding of the subject that I should. Compared to other directors, I am an expert. Relative to my children, I am a beginner. Many directors my age feel we are in a canoe in fast water that is changing direction and moving so quickly and over such difficult and varied terrain that it is extremely difficult to navigate and stay upright.
This lack of confidence also extends to directors’ understanding of social media in the context of the companies with which they are involved. Only a quarter of directors consider themselves adequately knowledgeable about social media to ask probing questions. When looking at this category by age group, there is a clear separation visible at the extremes. As shown in the table at the top of the next page, there is an age gap in directors that consider themselves very knowledgeable or that have only minimal knowledge. However, the middle range of having some awareness, but not a strong grasp on the topic at the level needed for board oversight is almost identical across all ages. Very few directors don’t understand social media at all (3%); however, all of them are 60 or older.