Written by Tim Collins, this article first appeared in The Financial Brand in November, 2017
Nine in ten CEOs of the most admired companies on earth are socially engaged. So why aren’t leaders in the banking industry following suit?
In the past year, only a handful of CEOs in the financial industry have been active on Facebook, Twitter or LinkedIn. This compares with nearly two thirds of CEOs in other industries who say they are professionally active in social media channels.
Who cares? Banks seem to be doing just fine.
One obvious reason is that most CEOs in the banking sector are knee deep leading their organization through the process of digital transformation, and social media participation is an easy proxy for “getting digital”. Staff, investors and even the media are more likely to see a digital transformation initiative in a positive light if/when they feel like the top exec is savvy in social channels. It’s a subjective and arguably somewhat subliminal message, but CEOs that want to be seen as digitally sophisticated should participate on social platforms.
Another argument for CEOs to be socially active is that they can present their organization in a more favorable light. The majority of Americans use search and social media to get their news. This includes news about banks. Socially active CEOs do a better job of getting their message out.
For example, check out the Google search results for Tim Sloan, the CEO from Wells Fargo, who has virtually no social media presence. Other than a few business profiles, the first page is mostly filled with negative stories about Wells Fargo’s account scandal.
Then take a look at the Google search results for Walt Bettinger, CEO of Charles Schwab. You can quickly find his Twitter and LinkedIn profiles, which push down other content — often below the fold or onto the second page of results. First impressions matter, and in a digital world, key stakeholders’ first impressions are often formed on social media.
Who are these stakeholders, and how are they impacted by a socially active CEO?
- Investors – They research the company and their executives as they make decisions about where to allocate their money, and they regard social media as a less varnished source of information.
- Customers – According to INSEAD, 82% of consumers are more likely to trust a company whose leaders engage in social media. It puts a human face to the bank.
- Current/Prospective Employees – 78% of professional prefer working for a company whose leadership is active on social channels. It is no coincidence that the three banks with socially active CEOs have significantly higher Glassdoor ratings than their 22 socially inactive peers.
- Reporters – Reporters start work on virtually every story by researching the key players online.
- Recruiters – They increasingly consider an executive’s social presence as they search for prospective board candidates. Socially savvy executives are more desirable as boards are increasingly being tasked with digital transformation.
Just a few years ago, Bank of America could post a tweet and would be confident that it would reach a substantial portion of its almost 500,000 followers. But the social networks didn’t want this to happen for free, they wanted BofA to pay them to reach people on their network. As a result, all of the social networks have throttled back organic access to followers from company pages and profiles. Today, a post on a company Facebook page for instance will reach less than 2% of the company’s followers. When a bank CEO participates on the company’s official social presence, practically no one will see it without paid promotional support.
But a CEO who actively uses his own professional profile can defeat the policies that social media platforms have put in place to protect revenues. The profiles for real people aren’t filtered, so the CEO can get the company’s message out to the public more easily.
Nevertheless, many CEOs continue to resist. A study of attitudes among CEO towards social media revealed three interconnected roadblocks to their participation: time, knowledge/resources, and risk.
1. Time Constraints – What CEO isn’t time starved? But executives who cite this as a reason for not participating in social media assume that they would entirely manage it themselves. In reality, CEOs rarely manage any communications effort alone, as they have marketing and communications teams that support them. In addition, there are many outside consultants that can help. CEOs don’t have to do this alone.
2. Knowledge and Resources – With multiple, ever-evolving platforms, each with differing expectations, social media can be complex. But again, virtually every major bank CEO has a team of people (internally or externally) that have already figured this out.
3. Risk Management – CEOs are afraid of saying something on social media that would negatively impact their company or their careers. This is not isolated to social media, and is why bank CEOs have communications teams that help them craft the right messages across multiple communications channels.
One note of caution. While executives are encouraged to pull in resources to support their social media efforts, they should not abdicate their social media efforts to marketing and communications teams. Delegating efforts like this often yield social media posts that feel sterile, promotional, canned and/or generally uninviting.
Remember, people will follow a CEO because of their standing as a top executive, but they are also following someone who needs to come across as real human beings (otherwise, what’s the point?). Every CEO should make sure that their personal brand is reflected in their social media efforts. It’s okay to show personal interests and hobbies — such posts portray the CEO’s humanity, which will be rewarded with more engagement.
With a well thought out social media plan and redeployment of existing resources, banking industry CEOs can be seen as “getting digital.” They can also more effectively communicate with CEO stakeholders and use scarce resources more efficiently. They can do this with a minimal incremental time commitment and without creating added risk. When you weigh the pro’s and con’s, bank CEOs should be more active on social media.