Why businesses must take corporate digital responsibility
Digital and data management crises at Post Office, TikTok and Facebook are fuelling the corporate digital responsibility movement
When hundreds of Post Office employees were prosecuted for theft between 2000 and 2014, subsequent events revealed a shocking example of organisational governance failure and a huge miscarriage of justice.
A number of convictions - and even some imprisonments - were made after Fujitsu’s Horizon computer system showed significant financial shortfalls in a number of Post Office branches. However, the Court of Appeal ruled in April that the convictions should be overturned because of glitches in the Horizon system that caused it to regularly make errors.
Justice Peter Fraser criticised the Post Office’s management for ignoring evidence that the system was not fit for purpose and failing to enforce a robust data auditing regime.
“The ensuing scandal highlights the danger of accepting data at face value and not having a thorough understanding of organisational data systems,” communications agency Allegory stated in its recent report, Corporate digital responsibility: what you need to know right now.
The need for CDR
The Post Office episode sits at the top of the report’s roll call of “high profile failures related to poor management of data and the digital technologies deployed by organisations”. These include TikTok being sued for selling children’s data and Facebook being investigated for a possible breach of EU privacy laws after the personal information of 533 million users was shared online.
Such crises have helped make corporate digital responsibility (CDR) a critical issue for both companies and the public. Indeed, Allegory cites stats that individuals are more concerned about cybersecurity than contracting Covid-19.
As a burgeoning area of corporate practice, CDR has yet to obtain an official definition or guidelines. However, a recent paper in the Journal of Business Research described it as a set of values around creating technology and data capture, operation and decision making, inspection and impact assessment, and refinement of technology and data.
Gazi Arif, visiting lecturer at The University of Law Business School, breaks the concept of CDR down into “digital ethics” around how data and technology should be used in an accountable manner and the decision-making that surrounds that.
“Digital ethics handles the complex nature of digital technologies and the many ethical issues that arise from them. They change the context and content of our interactions. Determining what to do, observing who will be affected, and the likely results of our actions, all have moral dimensions,” explains Arif.
With digital transformation intrinsically linked with economic and social development, digital ethics strategies within CDR help organisations better deal with the consequences of digital business processes, Arif adds.
He gives the example of digital platforms unintentionally accessing private information without proper authorisation as an area that should be governed by CDR.
“Recommendations generated by algorithms can optimise process, but at the same time, they classify and evaluate their users with far-reaching consequences, such as deciding whether to grant credit or insurance,’ he says. “The lack of transparency in such technologies leads to great uncertainty and there is a lack of accepted ethical rules to build trust in the digital economy.”
Since there are no rules for digital ethics, Arif concludes, every organisation needs to develop their own CDR guidelines based on their culture and values.
CDR and brand reputation
It’s undoubtedly a complex area, yet it’s an opportunity for companies to show leadership and make their strong CDR approach a differentiator in their brand reputation, argues Tim El-Sheik, chief executive and co-founder of “robotic co-worker” technology Nebuli.
“Enterprises can adopt their own CDR guidelines, which can be more relevant to their customers’ specific needs and the company’s internal technology framework,” says El-Sheik.
“With a data strategy built on the principles of digital ethics, companies can show their leadership within their markets by making their customers’ ethical concerns one of their top service priorities.”
El-Sheik gives the example of Apple deciding to input user privacy protection as the core feature of its upcoming iOS update. It impacts competitors’ ability to access user data while scoring positive points with younger customers, he notes.
“Gen Z is redefining the meaning of brand loyalty and customer expectations by putting their focus on how ethical and sustainable a brand is. They want to see evidence of a company’s efforts to deliver CDR and similar commitments which hold them accountable,” El-Sheik adds.
“The typical Silicon Valley message of social progress doesn’t fit with the fact that many of these companies completely disregard the importance of their users’ privacy and sensitive data. CDR now plays a primary role in maintaining a positive brand reputation.”
Beyond legal compliance
That’s the approach Rachael Goodman has taken as chief digital officer of online babycare brand Mum & You. She believes a solid CDR strategy that’s executed well will shape the reputation of a company and improve both its stakeholder relationships and product quality.
“In 2021, a simple nod to legal data compliance will not be enough to convince stakeholders and customers of great CDR performance,” Goodman states.
CDR is about more than just ensuring legal compliance and that GDPR standards are met when handling data, she says. It’s also about how a company commits to digital transformation and enables it in everything it does.
“As a small startup beginning in 2017, we recognised the importance of CDR, and unlike bigger organisations who had to relook at everything they do we have had the opportunity to make this part of our DNA from the beginning,” Goodman says.
Scaling quickly as a startup can sometimes come at the expense of good CDR practice, she notes. From the beginning, “we’ve made a concerted effort to define how our digital products will impact society, people’s lives and the longer-term environment. Our customers and employees must have absolute trust in the way we treat, hold, innovate with and use data.”
As the business grows, Goodman envisions a need to invest in more CDR expertise and resources. However, she is optimistic that she’s set out “a sensible blueprint”.
Such a blueprint must take a “people-first” approach, advises El-Sheik. “This puts human needs and aspirations at the centre, as opposed to the more commonly used technology-led approach.”
If only the Post Office had thought this way, rather than simply defaulting to what its technology told it. Not only would it have saved paying out millions in compensation, but it could have avoided impacting hundreds of people who now must rebuild their lives - highlighting where CDR and digital ethics have real-world effects.
CDR and data-driven carbon emissions
The carbon footprint of digital devices, the internet and the systems that support both account for around 4% of global greenhouse emissions and are tipped to double by 2025, according to Climate Care.
Data storage centres make up about a third of that and show no sign of slowing down thanks to the growth of online content creation and consumption. Against this backdrop, an increased adoption of corporate digital responsibility (CDR) is driving demand for sustainable solutions in this space.
Sheryl Haislet, chief information officer at digital infrastructure provider Vertiv, gives the example of data centre adoption of renewable energy, as well as uninterruptible power supply technologies and battery systems.
“These have a key role in the shifting energy landscape, through implementing grid balancing services and the ability to store surplus renewable energy that can be used by the grid when overworked,” Haislet explains.
“There are also innovations in server technology that can help ease the tension between data collection and sustainability, with examples including new compression techniques that store rich data with less energy, and ways of writing programs and software that lead to less energy use.”
But are these just remedies for symptoms rather than the cure? Companies need to focus on getting out of a “big data” mindset and concentrate more on generating lower volumes of higher-quality data with greater relevance to their business, argues Tim El-Sheik, co-founder and chief executive of Nebuli.
“We help companies refocus their attention on a data strategy built on a core aspect of data quality: data ethics. Conversations about technology and digital transformation strategy are not started until we discuss how data strategies can be built on clear CDR foundations.”