Social media, much like most new technologies, will inevitably be incorporated into corporate operations and processes in a range of ways - some successfully and some with less successfully. It's an evolutionary thing.


However, the issue for directors, management and shareholders, is the opportunity and threat that it can create for each. I suspect that a strong social media community of, say, shareholders in a particular company, can bring a lot of pressure to bear on the board and management - particularly when "a company insider" joins the social media community and is able to provide contrary information to that provided by the Chairman, management and the company's Press Office.

How much more incendiary will this become if a member of the press, brokerage or analyst communities is also a member of that company's social media community?

The management of stakeholder (and especially shareholder) expectations and the establishment of "one corporate truth" will become extremely challenging. Inevitably this will affect confidence in the company, its board and its managers.

I think the argument proposed by most Western societies is that in general, a move to democratic principles as an aftermath of the current Middle Eastern turmoil is a good thing.

This argument is based, I believe, on the assumption that the majority of Middle Eastern citizenry are moderate and therefore no institutionalised or formalised "Radical States" will emerge, or at least be less likely to emerge.

Leaving aside the glaring examples of the Gaza Strip or Iran (both illustrate the use of a sham democratic process that result in radicalism), I believe that this argument fails.

If one examines the rise of Islamic fundamentalism, it is only within the lax and legally protected environments of democratic states that enables extremism to be "operationalised".

In dictatorial states, where the will exists, extremism is quashed ruthlessly, or conversely, nurtured.

Regardless of where the funding of extremism comes from, the implementation of extremist strategies is best nurtured, for a range of reasons, in democtratic states.

The funding  of extremism probably comes largely from the wealthy dictatorial states or wealthy individuals within those states who have gained their wealth from the dictatorial structure of the state which has "bestowed" on them enormous economic and financial favours.

I suspect that the possible outcome of the current Middle Eastern turmoil will be the overthrow of most non-democratic states and their replacement with largely and initially, "non-extreme" democratic governments. Over time however, extremism will nurture independently of governments and be exported globally.

Western governments will struggle to deal with this trend as, on the face of it, they will be forced to deal with democratically elected governments. In the past, one could develop a relationship with the "ruler" or dictator and that relationship could be engineered to deliver the particular needs of a foreign power - even if unpopular with the "public". An example of this was Egypt's antipathy to Hamas in relation to the Gaza Strip or even Egypt's and Jordan's peace treaties with Israel.

In the future, a government that appeases the West where the appeasement is in conflict with the will of "the public", will have to face that public at the next election. This is a much more difficult achievement.

Add to this the growing influence of Muslims in Western and democratic societies and the increasing dis-inclination of Western governments to disenfranchise a growing proportion of their constituencies. The birth rate of Muslims in Western societies is often many times that of non-Muslims - thus  this influence will grow and become more acute. In France it is reported that Muslims exceed 13%-14% of the population at the moment and growing rapidly.

The upside however, is the potential that a democratic society composed of a majority of moderate and reasonable people, will deliver a fairer and more equitable society for itself. A moderate society will, in theory, shun extremism of any nature or origin.

Although that is the hope, one needs to remember that the US, the "flag-bearer" of democratic states, is the home of a growing number of its own extremists - both politically and religiously.

Therefore, democracy in and of itself is unlikely to be the panacea of all current and potential threats that the world currently faces from extremism.

My hope is optimistic while my expectation is pessimistic.

Much like what is happening in the Middle East at the moment; you can oppress the people for just so long before they engineer a way to communicate, unify and impose their will.


Instead of "people" one could read "shareholder" as a direct analogy with the corporate world.

Organisations that are, and remain obstinate in the face of overwhelming shareholder dissatisfaction will, in the inevitable passing of time, succumb to the power of its owners. Corporations, their boards and executives who conveniently hide behind corporate walls, internal processes and legal ploys will, in time, face their destiny.

One of the challenges discussed as an imminent board challenge is communication with shareholders. Unfortunately, most corporations (and their I.R. departments) see communications as one-way - from the corporation to the shareholder.


What is needed is a "listening to shareholders" capability whereby corporations learn what their shareholders want in terms of specific (and not assumed) outcomes - and aligns the corporation to the delivery of those outcomes. And we're not talking about listening to a few shareholders, as they do now (i.e. the institutional investors as proxy for all shareholders.) Instead, we're talking about surveying all shareholders and establishing the company's Shareholder Metrics.

Corporations' failure to deliver shareholder outcomes is generating a growing and powerful activist investor community. There are activist fund managers and investment portfolios currently and quietly building their war chests in order to pounce on weak and indolent registries. Be warned.

Couple this with the inevitable morphing of the power of social media into the investor market and you have a new and powerful threat that will give boards, their members and executives severe headaches in the coming years - but will deliver greater accountability to the corporations' owners.

The media, particular Network 7, is getting a whole lot of its own "shit" thrown for its airing of Tony Abbott's "shit happens" comment.

We all know the heights and depths that the media is capable of, so there should be no surprise that Network 7 aired the comment.

The issue is not the comment, per se, but that Abbott clearly froze when asked a legitimate question requesting clarity regarding the context of his statement. The question now being raised is whether Abbott has got what it takes under pressure. Apparently "his people" were pre-warned of the question so surprise is not an excuse.

The incident reminds me of George W Bush being told of the 9/11 incident. He sat there staring at a kid's book which was upside down - stunned, alone and vulnerable and not knowing what to do or what to say. Certainly this can happen to anyone, but you expect your leaders, or potential leaders, to be a bit more robust and resilient to such situations.

The mistakes that management and directors make in supporting the community is to confuse enabler with outcome. Corporations must be responsive to community (and other stakeholders) in order to deliver their corporate outcomes (whatever they may be) - no more and no less.


Pusuing "community" on par with shareholder objectives is to confuse enabler with outcome.

A corporation should satisfy community and other stakeholder needs only to the extent that they have to, and to enable the corporation's objectives to be satisfied. Same applies to employees, etc. That doesn't mean that you don't provide an "exceptional" response - but only if it is required. To exceed the minimum (as politically uncomfortable as that may sound) is inapproproiate - particularly when the funds used for those purposes should be applied to unfulfilled corporate objectives.

For all of those well-meaning and well-intentioned people who advocate for the primacy of community, staff or other stakeholder outcomes, I have worked in and with hundreds of corporations and have seen literally billions of dollars of shareholder funds fritted away on well-meaning and well-intentioned initiatives that were irrelevant to corporate requirements but driven by subjective management interpretation, ego, networks or other non-core influencers. Sponsorships of "pet" projects without a corporate pay-off is a perfect example.

The corporation is an entity engineered to deliver shareholders their definition of "benefit". It is not an agent for change nor a tool for community, staff or others to achieve their personal objectives. To confuse this issue is to play craps with shareholder funds.