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A social media policy is an internal document guiding employee interactions on platforms like Facebook, Instagram, and Twitter. While these platforms offer opportunities for firms to engage potential customers and mold brand identity, they also pose risks, as careless posts can damage a company's reputation. The video discusses the importance of social media policies and outlines what constitutes a good one. The presenters, eFORMS, highlight that they provide a comprehensive database of documents and will share a link to a customizable social media policy at the end of the tutorial. The video aims to clarify the distinction between social media policies and social media practices.