As the popularity of social websites like Facebook and Twitter continue to grow, the challenges facing the business industry as well as individuals become a critical issue that must be addressed. Many businesses are ignoring the opportunities and risks at their own peril. Those who decide on a proactive program can multiply their client base, develop new business and increase their brand recognition. Those who do not can be at risk of negative advertising and possible litigation stemming from employee or consumer complaints. A memo dated May 30, 2012 made public by the National Labor Review Board (NLRB) affirms the increasing danger that businesses encounter concerning their social media policies. It is essential that companies adequately check out their risk management policies and insurance coverage to include social media perils.In regard to employees’ online activities, businesses need to figure out what types of control are needed for their individual circumstance. Do staff use online media sites as a part of their job? Are they allowed to use company resources even when posting on personal sites? In the NLRB memo mentioned earlier, many businesses were cited as using unlawful practices to control their employees’ social networking activities. Many companies were vague or too broad in the language used and the language could possibly be understood as a violation of their free speech rights. Wal-mart was favored for their social media strategy because they explained any ambiguous language so as not to disregard any associate’s First Amendment or state-constitutional free speech rights. Failure to authorize appropriate controls have the potential to lead to illegal employment practices, misleading advertising, discrimination against a legally protected status (e.g. race, gender) or breaking of federal and state laws. There could also be further liabilities to those businesses under the purview or direction of a regulatory association.In regard to business records management (RM) procedures, Symantec among other security control organizations stress the importance of implementing an official retention plan to cover against risks. A Forbes.com article about social media risks included a comment from Gartner Group figuring that by the end of 2013 half of all corporate litigants “will be asked to produce material from social media websites for e-discovery”. Absence of a sanctioned RM policy could stifle the ability to produce records mandated by the court as well as add to the chance of unintentionally releasing material that would otherwise be kept from public exposure. Development of a transparent and executable policy can protect against legal liability or an embarrassing public relation situation.The public wants the power to connect through online sites like Facebook and Twitter so the business industry needs to respond, adapt or lose an opportunity to see the great gift that comes with these growing technologies. One way some companies are taking advantage of the prospect is by developing “canned” text or pre-approved topics/statements that may be posted by employees. This approach can be a practical way to initiate a proactive social media policy and secure their investment at the same time.In essence, businesses need to understand the risks and address social media policies in regard to crisis/risk management, intellectual property, client/employee privacy, and compliance with federal and state laws and industry regulatory restrictions. With the increasing use of technologies, companies should also speak to their insurance agents to ensure they have satisfactory insurance coverage – some providers require special riders in order to grant coverage against social media liability.