On March 5, biotechnology company Chimerix refused to provide a potentially life-saving drug to 7-year old Josh Hardy who was battling cancer. The drug had not yet received FDA approval, and the company had discontinued its “compassionate use” program to dedicate resources to Phase 3 testing of the drug. One week later, following a massive social media onslaught that captured national attention, the company relented. In this Closer Look, we dissect the powerful force of social media and examine its potential impact on corporate reputation. We ask: Why aren’t more companies prepared to deal with the reputational risks that emerge through online channels? How should information gathered from social media outlets be used to supplement a comprehensive risk management program? Are stories such as this one a board-level issue? If so, at what point do they become one? If Chimerix were your company, what would you do differently?
Copyright held by David F. Larcker, Sarah M Larcker, and Brian Tayan. Further inquiries about reproduction and use should be directed to the Corporate Governance Research Initiative.
