We help simplify money management. American Express has the solutions to keep you on top of your spending.

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If the Department of Defense has a social media policy, isn’t it time your company created one? If you delay any further, it would be safe to say your business is officially slower than the government. Jokes aside, social media policies are serious business.

True to form, when there’s a bunch of legal mumbo-jumbo this gear-head doesn’t understand, I call on one of the smartest legal minds I know: Nina Kaufman, business attorney, infopreneur, and the brains behind AskTheBusinessLawyer.com, to get straight-forward clarity about the issue.

What should businesses consider when creating social media policies?

Nina Kaufman: Social media policies are, in many ways, an extension of general employment policies that have been around for decades. Employers use them to set ground rules and expectations with their employees. However, it takes a delicate balance. As a business owner, you want employee and social media policies to set a professional tone for your company. But you want to avoid making them so draconian that employees fear they've dropped into a George Orwell novel, and look for the first opportunity to get another job.

Social media can be a powerful business tool in the right hands, and a powerful business nightmare in the wrong ones. One vital consideration: can you trust your employees to be mature and accountable? For some companies, it may be enough to tell their employees to \"be responsible, accountable, and ethical.\" Others may need more hand-holding detail, such as not using and tagging the company logo on your Facebook page where you have uploaded debauched photos of yourself at a college fraternity party.

Is there any way that social media policies can infringe on an employee's rights?

NK: Many of the social media guidelines merely mirror what is already acceptable in the off-line world: don't blab confidential client information; don't share company trade secrets; be careful about where, when, and how you choose to badmouth your employer.

While companies tend to shy away from placing restrictions on employee activities outside of the workday, there's a growing awareness that employees need guidelines. With the Web 2.0, bad stuff can happen just as easily outside company time. Many financial institutions, for example, have prohibited their employees from using social media because of the great concern that confidences may be divulged, or that an employee may say something \"out of compliance\" with securities regulations. That said, it's one thing to have a social media policy, and quite another to spend time trolling the Internet to enforce the behavior.

Want more tips on social media? Check these stories out:

Should employers ask employees to \"sign off\" on the policies or is it enough that the employees read the policy?

NK: Ideally, employees should be required to \"sign off\" on the social media policies presented by their company. If you don't, it pits the employer and employee in a classic \"he said/she said\" situation. Without some kind of written sign-off, it's far too easy for an employee to claim \"I never got the policy\" or “Nobody ever told me I couldn't do _______.” Should the matter go to court (as in a dispute over whether you did have the right to terminate an employee for Tweeting about a client’s pre-launch strategies), you’ll want the paper trail.

What should every social media policy include? What are the key elements to a solid social media policy from a legal perspective?

1. Mindfulness. Sad to have to say it, but sometimes people need reminders to “watch their language” and “think before they speak (or type).” Like playground rules – there’s no name calling, sand-throwing, storming off with other people’s toys. This dovetails with rules about refraining from vulgar or obscene language or images; harassment; creating a hostile environment; and other prohibited behaviors in the workplace. Whatever employees post online becomes public . . . and very difficult to make “disappear” if it’s ugly. Encouraging employees to see themselves as ambassadors of your company can help shift their mindset when engaging in social networking—whether at work or otherwise.

2. Accountability. If you blog it, you “own” (up to) it. Employees need to be made aware that the company intends to hold them legally liable for anything they post online, especially if they indulge in negative commentary that could leave the company vulnerable to a lawsuit from co-workers, competitors, or other third parties who object to the content. And whether or not they’d win is almost irrelevant in the face of the cost and disruption of having to contend with the legal headache. Transparency is also crucial: employees should identify whether they are speaking in their own name, or in the name of your company.

3. Discretion. Respect the confidentiality and proprietary nature of the company’s information and intellectual property, and that of its clients. Social media policies should address unauthorized uses of copyrighted material, trademarks, and divulging confidential business plans, financial projections, and the like; just as you would in the off-line world.

What risk do companies take if they don't have a social media policy?

NK: Information can travel around the globe in a nanosecond. Without a social media policy, you run the risk that damaging information to your company or your clients can make its way through cyberspace.

Because social media is so new, many people don't have an instinctive sense of the right and wrong way to use it. There isn't necessarily a common understanding of appropriate social media etiquette. A social media policy educates your employees about your expectations for their behavior. It also gives an indication of your company culture and work environment.

What size should a company be before they really need a social media policy?

NK: Companies will want to think through their social media policy before they even hire that first employee. In such a new area, the last thing any business needs is inconsistency . . . and that's exactly what can happen if your first batch of employees had no guidelines, but the more recent hires are prevented from having Facebook pages. If you take the view that every employee--no matter how experienced or junior--is an ambassador for your company, you'll recognize that each and every one needs (and frankly, probably welcomes) guidance on what will be considered fair.

Can social media policies cause more harm than good? If so, how? Why?

NK: Leaving aside possible “freedom of speech/expression” issues, I believe that social media policies can do more good than harm. Employers and their clients have a legitimate interest in protecting the intellectual property they have tried so hard to create. They also have an interest in maintaining their reputation, which I believe outweighs an employee's right to use social media to smear and gossip about them.

But when it comes down to brass tacks, most social media policies try to ensure that employer and employee have the same understanding of \"accountability,\" which brings us back to the original question. If you can trust your workforce to make mature, thoughtful choices when engaging in social media, do you really need an abundance of social media “rules”? And if you can’t trust them, do you have the right workforce? It’s a matter of striking the right balance -- for your company -- between control and confidence.

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