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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 influencing brand identity, they also pose risks; inappropriate posts can harm a company's reputation. The video discusses the role and characteristics of effective social media policies. eFORMS presents itself as the largest database for various documents and encourages viewers to watch until the end for a customizable social media policy link. It is crucial to differentiate between social media policies and social media usage guidelines.