Category Archives: Finance

Sex, Lies and Tweets. Arrogance or Ignorance?

Today’s Wall Street Journal was riddled with examples of “smart” people in high places making age-old mistakes.  And it’s the oldest stuff in the book.

Yahoo’s CEO misstated his college degree on his online biography. This would have been no big deal until Mr. Thompson decided to lie about how it got there by blaming a search firm. That is when the cover up got him fired. Does this remind anyone of the Martha Stewart lie that put her in jail?

Best Buy’s new CEO was caught having an affair with a subordinate and resigned, but the Founder and Chairman didn’t tell the ethics committee and is off the board.

Francesca’s Holdings Corp., a public company, fired their CFO because he “improperly communicated company information through social media.”   One example, Gene Morphis (@theoldcfo) tweeted on March 6th: “Dinner w/Board tonight. Used to be fun. Now one use be on guard every second.” Does this guy think he is talking to someone privately or is he unclear on appropriate behavior for a CFO?

Is this arrogance or ignorance? Do they believe they are too valuable to get fired or do they believe they won’t get caught?  Maybe it is simply lack of common sense. In the case of the CFO tweets, the comments were blatantly unprofessional.

We can spend our time wondering how this stuff still happens, or see the writing on your Facebook wall: it’s hard to get away with bad behavior if you plan to publish it on line.

Good behavior is not just required of the ordinary employee. Executives are under closer scrutiny than ever, given that companies are judged by the hiring decisions they make.  These executives put their boards in a difficult position, their brand in a bad light, and can put the company’s stock price in peril. Best Buy is already struggling to compete with Amazon and Apple, Yahoo with Google. A blaring WSJ headline is certainly not going to help.

Ethics and social media policies are not just for the lowly, and they could be intertwined with an overall media policy. If these companys have them, did they share them with the executives who made these mistakes? I’d love to know how your company handles your code of conduct. Let us know. We won’t tell. :)

Financial Industry Is Slow To Get Social, Restrained by Regulation

Series 1 on Social Media in Highly Regulated Industrieslocked keyboard

Some in the financial industry think it simpler to abandon social media, but for most, they are stuck in a difficult juxtaposition as they are expected to grow their book of business, but then told they cannot use all the tools available to do so. My Edwards Jones money manager is forbidden to use Facebook for business, and the company won’t allow her to have access to the site from her office.  Merrill Lynch just recently began allowing their employees to use LinkedIn, but under strict guidelines.

With social media in full swing these days, what is it that keeps the highly regulated industries from swimming with the rest?  The difference might be in the government regulations rather than in the social medium.  Banks are regulated by the OCC, investment firms are regulated by the SEC and other industries like legal and real estate are heavily regulated at the State level.   The biggest challenge is that companies would need to monitor online activity for all of their employees and make sure no laws are broken, or invest in social media training as a matter of prevention. This costs money, but does the cost outweigh the benefit? Facebook and Linkedin have already been shown to be rich oil fields of prospects and clients, so how can these companies maneuver safely and confidently within those realms?

For several years, I worked with a large family owned real estate company headquartered in Connecticut, where we immersed more than 2000 agents in social media training. This occupation is about relationships, yet agents were fearful of the platform, mainly because they could not grasp how to use it. I heard more than once, “I don’t want people to know my phone number, my address” To which I replied “isn’t it the same as posting a sign with your face and phone number in front of your customers’ houses?”

On a similar level, companies are fearful of employee missteps online where everything published can be tracked.  Every highly regulated industry has guidelines for conduct, but now these guidelines must be extended to social media channels.  Training on acceptable use of social media, and monitoring, must be implemented to ensure those guidelines are followed.

Social media has already knocked on the door of each and every company and will not go away. Time will tell who manages to work within strict regulations to take advantage of the growth opportunities of social media, and who gets left behind.

Thanks to contributing writer Lori Vintilescu.