The explosive popularity of social media has left corporations in the dust. Blogs, Facebook and Twitter–online forums that let like-minded people connect–attract not only employees surfing the Internet rather than doing their work, but salespeople looking for new customers, marketing executives seeking a cheap way to promote their products, and human resources staffers trying to fill jobs. Such technologies can leave companies exposed to a variety of risks. But experts say, not only have few companies taken steps to formulate policies on how to deal with those risks, many may not even recognize the danger.

Allen Nelson, general counsel, chief administrative officer and executive vice president at $1.1 billion claims administrator Crawford & Co. in Atlanta, Ga., started taking a look at social media because he was concerned that the company could be the subject of disparaging comments on the Internet. Once he began looking around, Nelson was surprised to find Facebook pages with the company name on them, set up by employees who were using them to communicate.

"That's a perfectly good thing to do, candidly, we just weren't aware from a senior management point of view," Nelson says. "That was one of the things that was kind of eye-opening."