A Pew Research Center social networking study  (August 2011), reported that 65% of U.S. adults use social networking sites like MySpace, Facebook or LinkedIn.  Many are using these sites at work.  Some are using these sites to talk about work.  And a few are getting fired for it.

As a business owner, you basically have two choices in managing social media risk.  You can keep your fingers crossed and hope your employees don’t do or write anything stupid involving your company.  Or you can create a social media policy, support it with training, inform it with feedback, and empower employees to protect their company and brand.

Surprisingly, most U.S. companies have not taken the necessary steps to mitigate online reputation risk from their own employees. According to a Manpower report about the impact of social media in the global workplace, only 29% of U.S. companies had a social media policy.

From my perspective, the most striking data from the Manpower report was that 8% of U.S. companies have had their reputation negatively affected by employee use of social networking sites.

I don’t know the extent of the financial harm for the 8% of U.S. companies who suffered reputational damage, but I’m willing to bet that as soon as the PR crisis was over, the CEO was on the phone with her HR department asking for a social media policy.

A social media policy is not a vaccine, but it is better to set expectations and to have an open and transparent process regarding social media use by employees in and out of the workplace. Unfortunately, good judgment is relative. As a business owner, I would rather be sitting through a deposition with a social media policy in my hand, instead of a blank sheet of paper and a pencil.

If your company doesn’t have a social media policy, it needs one.  If your company has a social media policy, management should take a second look – especially after the National Labor Relations Board (NLRB) released a report about employee use of social media and employers’ social media policies.

Next week, I am going to take a closer look at the recent NLRB decisions and explain how you can use the lessons learned from these cases to create the best social media policy for your company.