Digital Update USC #CorpGov Summit

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What's New in the Digital World: A Director BriefingModerator Fay Feeney - CEO, Risk For Good

Colleen Cunningham - Global Managing Director, Resources Global Professionals

Robert Magnuson - CEO, Magnuson & Company

“The Beginning is Near“The Internet has fundamentally changed the way people find,

discover, share, shop & connect.

The Cloud: Transforming IT

2011 GLOBAL SNAPHOT OF THE SOCIAL CUSTOMEREUROPE (EMEA)31% comment on blogs27% comment in forums20% uploaded a video online39% uploaded a photo online63% watch a video online13% actively blog

LATIN AMERICA49% comment on blogs

35% comment in forums41% uploaded a video online56% uploaded a photo online

74% watch a video online27% actively blog

ASIA PACIFIC42% comment on blogs43% comment in forums29% uploaded a video online50% uploaded a photo online65% watch a video online37% actively blog

CEO CHALLENGES ON INTERNAL CHANGE

• The social brand has caused chaos and organizational anarchy in many companies

• Bring Your Own Technology

• Employees are operating their own equipment (mobile phones, Ipads, etc.) with little to no guidance, direction or governance

• Different geographies and business units are creating social communities externally and not sharing or communicating internally

THE EVOLUTION OF SOCIAL BUSINESS

SOCIAL CUSTOMER

• Technology Innovation gives customers a voice

• They are Influential• Social Customers are

trusted amongst their peers as influence grows

SOCIAL BRAND

SOCIAL BUSINESS

• Companies and brands join Twitter, Facebook and create corporate blogs

• Engage with the social customer in various channels

• Social Media teams are forming slowly

• Organizational silos are torn down between internal teams to include social media

• Social becomes an essential attribute of organizational culture

• Governance models and social media policies are created

1995 to present

2003 to present

2008 to present

Digital: IT, Social Business & CommunicationWhere is your Business? Where is your Board?

Where are You?

Operational Execution

Suppliers

and

IT

Operational Execution

Suppliers

and

IT

People Attract &

Retain Talent

Compensation and

Benefits

People Attract &

Retain Talent

Compensation and

Benefits

Financial Reporting

Liquidity

Capital Structure

Financial Reporting

Liquidity

Capital Structure

Build

and

Nurture Brand

Build

and

Nurture Brand

Conflicts ofInterest,

Regulatory

and

Litigation

Conflicts ofInterest,

Regulatory

and

Litigation

Chief Operating Officer

Human Resources

Chief Legal Officer

Chief Financial Officer Sales and

Marketing

Strategy And

Reputation

Value Creation

Strategy And

Reputation

Value Creation

CEO,Senior

Management

How is Digital Managed?Who Bridges the Gaps?

Executive & Board Capabilities

Who Should Fix the Boardroom?

WHY DOES ALL THIS MATTER?

Your Board’s Risk Map

1

2

3

Relative Uncertainty

Rela

tive

Impo

rtan

ce 6

5

Higher

Higher

Lower

47

8

9

1

Financial performance

Relevant Business Strategy

3

4

Board composition

5

6

Shareholder communications (proxy & disclosure )

7

Whistle blowing

2

XYZ Company

Management Integrity

8

Negative media/social media -Reputation & Crisis Mgt

9

10

Risk oversight

10 CEO comp – Say on Pay

Attracting, Retaining & Exiting of Mgt & Board

Current Phase of Digital: SOCIAL

S : is for speed — everything is now happening faster

O: stands for open. If you don’t have an open environment inside your company or country, these new tools will blow you wide open

C: collaboration because this revolution enables people to organize themselves within companies and societies into loosely coupled teams to take on any kind of challenges — from designing a new product to taking down a government.

I: individuals, who are able to reach around the globe to start something or collaborate on something farther, faster, deeper, cheaper than ever before — as individuals

A : alignment

L : leadership that aligns

Social BusinessListens

Lesson’s Learned

The Goal:Crisis Prevention

“Values Audit”—Are you values aligned with your business? Ensure A Culture of Integrity Communicate Your Values

Where is Your Reputation?

• Your message on: website, blog, etc.

• Content should be optimized for search w/terms that are relevant to your business

• Facebook status updates that promote blog content

• Content shared NEEDS to add value: conversation and community

Your Message

• Occasional tweets on promoting blog content

• Cross promoting other social channels, when relevant

• Youtube channel and new videos to link back to your message

• Videos can be shared on Facebook, YouTube

• Optimize Google+ page with relevant links and content back to other channels

• Unique content

A Case Study

Print Media Missed The Digital Revolution

•Didn’t listen

• Failed to adapt

• Too little, too lateTotal Daily U.S. Newspaper Circulation (Million)0

50

100

150

200

250

55.7

124

31

240

20002010

A Case Study

Print Media Missed The Digital Revolution

• Now The Business Is On The Ropes

• Old (Ad) Revenue Model Defunct

• New (Paid Content) Revenue Model A Tough Sell

Newspaper Classified Advertising Revenue ($B)05

101520253035404550 48.6

8

22.8 2620002010

The Boardroom

Digital Business DisruptionImpact on your Business1. What is the most significant

impact digital has had on your business?

2. What is your CEO doing to lead the effort?

3. What is your board chairman doing to prepare your board to oversee the digital challenges?

What about your Board? •Do you Know?

• Where your company stands on key digital issues?

•What is your Plan for 2011 – 2012?

• Reinforce values and brand equity

• Enhance shareholder & stakeholder communications

• Address Dodd-Frank Act specifics

• Messages the CEO & board’s qualifications and skills

Assessment

Plan

ResourcesActions

Evaluate and Enhance

Start Learning About Digital Now! It is not too early to take action.

• Business Model Disruption• Social Business & Social Media• Board Visibility: Yahoo, News Corp &

HP

Understand how your business is being perceived by shareholders and stakeholders?

Who is going to talk to your CEO about digital and social business?:

Leading, managing, monitoring and crisis prevention

THANK YOU!

(c) 2011 All Rights Reserved