The ICAEW’s approach to the misuse of social media – what are a regulated firm’s responsibilities?

The ICAEW recently extended the Duty to Report Misconduct to member firms (see our recent blog). In light of this, when does an ICAEW member firm have a duty to report a principal or staff member who is a member of the ICAEW and who has potentially misused social media?

Member firms must report to the ICAEW any events which may indicate that a relevant person may be liable to disciplinary action in accordance with the Disciplinary Bye-Laws (DBLs). But how do firms assess whether questionable social media communications cross the threshold of seriousness to amount to conduct which may be liable to disciplinary action? 

What should be reported?

The ICAEW’s DBLs and Guidance on the Duty to Report Misconduct (the Misconduct Guidance) defines “misconduct” as committing (or omitting to do) any act, whether in the course of carrying out professional work or otherwise, that is likely to bring discredit on themselves, the accountancy profession or the ICAEW, or which falls significantly short of the standards reasonably expected of a member/firm.

In Appendix 2 of the Misconduct Guidance, the ICAEW specifically mentions inappropriate use of social media as a matter relating to an individual’s personal activities that is likely to constitute misconduct. The Misconduct Guidance expands on this to state:

“This will include the making and publishing of racist, homophobic or other offensive comments or the sharing of offensive material.”

At first blush this seems straightforward: if an ICAEW member makes an obviously racist comment on a social media platform, this would breach the requirement in the ICAEW’s Code of Ethics to avoid any conduct that might discredit the profession[1]. This conduct would therefore indicate that the member may be liable to disciplinary action, and should be reported. 

But what if a member has said something on social media which is controversial but isn’t obviously racist, homophobic or offensive? We all have a right to freedom of expression and the ICAEW recognises in the Misconduct Guidance that members should not be reported for merely expressing their views in strong terms:

“This [inappropriate use of social media] will not include instances where the member has made a point forcefully in a heated debate without any offensive content in the comment made.”

The right to freedom of expression under Article 10 of the European Convention of Human Rights provides that:

“Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.”

However, this is not an absolute right. Any exercise of this freedom by an ICAEW member remains subject to the duty to avoid conduct that might discredit the profession. 

Unfortunately, there is no “bright line” between comments which are a legitimate exercise of a member’s right to freedom of expression, and those which amount to a breach of the ICAEW’s Code of Ethics. This is very much a judgment call based on the facts of an individual case.  However, we have set out below some helpful guiding principles.

Posts which identify, or are connected with, a member’s profession may attract more scrutiny

A member is more likely to be liable to disciplinary action where social media posts are made in a way which is connected to their profession.  Posts on a LinkedIn account which identifies a member as a chartered accountant and/or member of the ICAEW, as opposed to those made on a purely personal platform, are more likely to discredit the profession. 

For the same reason, posts which are made in an “open” forum, which can be viewed by the world at large are more likely to lead to a regulatory investigation than those made within a closed or private group, but there may also be circumstances where views expressed in a private message chat could fall foul of the DBLs.

The language used may be more important than the views expressed

As demonstrated by the cases below, when deciding whether a comment on social media might give rise to disciplinary action, it is important to consider the language used by the member.  

In the case of R (on the application of Ngole) v University of Sheffield [2019], the Court commented that: “the obligation to maintain confidence cannot extend to prohibiting any statement that could be thought controversial or even to have political or moral overtones…. The expression of such views in offensive language, however, might well damage confidence…In our view it cannot extend to preclude legitimate expression of views simply because many might disagree with those views: that would indeed legitimise what in the United States has been described as a “heckler’s veto”.

Similarly, in Diggins v BSB [2020], the Judge concluded that the focus of the Panel “quite properly … was not so much on the message as the likely effect of the florid language employed to express that message”.

In GMC v Harrop [2021], the Tribunal stated “…it is important that caution is exercised, particularly in the manner, language and tone that is used. When a registered practitioner strays into inappropriate, insulting and—as in one admitted allegation in this case—intimidating behaviour, that falls outside the qualified right to free speech and risks bringing the profession into disrepute”.

In Holbrook v BSB [2022], The Panel concluded that “…given the importance ascribed to freedom of expression in the authorities….it follows that, for the expression of a political belief to be such that it diminishes the trust of the public in the particular barrister or in the profession as a whole will require something more than the mere causing of offence…..[it would need to have]  gone beyond the wide latitude allowed for the expression of a political belief, particularly where the speech was delivered without any derogatory or abusive language and the objection was taken to the political belief or message being espoused, rather than the manner in which that belief or message was being delivered”.

While the above authorities relate to other regulatory bodies, the principles apply equally to ICAEW cases. These cases indicate that it is unlikely that it will be necessary or proportionate for a member to be liable to disciplinary action for simply making a comment which could be controversial, unless it is expressed using inappropriate language or is discriminatory, dishonest or abusive. 

The firm’s investigation

Whether an investigation by the firm is required

While one or a handful of messages/social media posts can be dealt with quite simply, a more in-depth investigation by the firm may be required if there has been a campaign of social media posts across different fora and/or for a protracted period of time. If a firm is concerned about social media comments or communications made by a staff member who is a member of the ICAEW, it should consider conducting an internal investigation in order to establish the circumstances surrounding the making of the posts or communications. In doing so, it will be in a better position to decide what, if any, steps should be taken in relation to the staff member’s employment and whether any reports to the ICAEW under the DBLs are ultimately required.

It should also be noted that the Misconduct Guidance states that, if a firm has started an internal investigation or disciplinary process, it does not have to make a report to the ICAEW’s Conduct Department until that process has concluded. Moreover, if, at the end of an internal investigation, it is concluded that the principal or member of staff may not be liable to disciplinary action, a report does not need to be made to the ICAEW.

Structuring the firm’s investigation

At the outset, if the firm elects to conduct an internal investigation, many issues will need to be considered to ensure that the investigation is both comprehensive and robust, inter alia: 

• Who should be conducting the investigation, and who will be assisting?
• What conduct should be investigated, and over what time period?
• How should evidence be obtained, stored and secured?
• Are individuals required to be interviewed, and if so, what should they be told about the investigation?
• Do legal privilege considerations apply to the investigation, and, if so, how should that be managed throughout the life of the investigation?
• How can the firm protect its reputation during the investigation process?
• Are there any investigative decisions which may have potentially adverse implications further down the line, whether regulatory or otherwise?

All material generated as part of the investigation process should be retained, alongside a detailed decision log which documents the key decisions in the investigation. This will become vital in responding to any potential future questions about the investigation and its outcome. Many firms elect to appoint an external legal adviser to lead the investigation to ensure that it is credible, robust and sufficiently independent, that any conflicts of interest are minimised, and that legal issues (especially those relating to privilege) are handled appropriately.  

The ICAEW’s Code of Ethics states that conduct which might discredit the profession includes conduct that “a reasonable and informed third party would be likely to conclude adversely affects the good reputation of the profession[2]”. It is likely that the firm’s internal investigation will first focus on establishing the circumstances surrounding the making of the post/communications in question. This may include, for instance, obtaining and reviewing documentary evidence, considering the relevant internal policies and procedures, as well as interviewing any individuals and staff members involved. A clear understanding of the factual background will likely be essential in informing the firm’s assessment as to whether a reasonable and informed third party would be likely to conclude that the member’s communications adversely affect the good reputation of the profession.

At the conclusion of any investigation, the firm will need to decide whether any reports are required to be made under the DBLs. The decision as to whether a report should be made to the ICAEW, and the contents of any such report, is often nuanced and finely balanced. A firm should therefore consider obtaining independent advice in relation to this decision. Our team is experienced in providing specialist regulatory advice to accountants and accounting firms on these issues. 

In circumstances where the social media posts are extensive, a robust internal investigation would be very important in assessing the circumstances surrounding the alleged misconduct and establishing whether a report to the ICAEW’s Conduct Department is required. The investigation may legitimately conclude that a report is not required under the DBLs, for a variety of reasons. In such a scenario, the firm must carefully consider and document its reasons for coming to that conclusion. One can envisage a scenario whereby the ICAEW is subsequently notified of the communications separately and believes that regulatory action is necessary. If the regulator’s assessment of the circumstances differs from the firm’s assessment, it will likely seek an explanation from the firm for its decision not to report, perhaps some time after the investigation has concluded. In this scenario, it will be imperative that the firm can provide some contemporaneous evidence to demonstrate it had properly considered whether to make a report and that its decision was reasonable in all the circumstances.

Questions and judgements surrounding the use of social media, particularly by those in a regulated profession, are complex. Communications on social media are being subject to increasing scrutiny by accountancy regulators, and what was previously considered private can now be captured by professional regulatory regimes. Firms should respond promptly, comprehensively and fairly when dealing with potentially inappropriate posts on a social media channel. Failing to do so could not only affect a firm’s reputation in the market, but also its regulated status.