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A social media policy is an internal guideline for companies to manage employee interactions on platforms like Facebook, Instagram, and Twitter. These policies help firms reach potential customers and shape brand identity while mitigating risks associated with negative employee posts that can harm company reputation. The video explores the importance of social media policies and outlines the features of an effective one. The presenters, eFORMS, emphasize their role as a comprehensive document database and invite viewers to watch until the end for resources to create and customize a social media policy online. The discussion also highlights the distinction between social media policies and social media practices.