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A social media policy is an internal document that guides employee interactions on social media platforms like Facebook, Instagram, and Twitter. As these platforms grow in importance for sharing information and shaping brand identity, they also present risks, such as damaging posts that can harm a company's reputation. The video discusses the significance of social media policies and outlines what constitutes an effective one. eFORMS introduces itself as a comprehensive database of documents and encourages viewers to watch until the end for a customizable social media policy link. The video also highlights the need to differentiate between social media policies and social media use.