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A social media policy is an internal guide for employees on how to interact on social media. With platforms like Facebook, Instagram, and Twitter dominating information sharing, companies have increased opportunities to engage customers and shape their brand identity. However, these platforms also pose risks, as inappropriate posts can damage a company's reputation. The video discusses the importance of social media policies and what constitutes an effective one. It begins with an introduction from eFORMS, highlighting their extensive document database, and encourages viewers to watch until the end for a customizable social media policy template. The video also aims to clarify the distinction between social media policies and social media usage.