Embracing Ethics: Four Principles for Navigating Ethical Brand Leadership
By Chris Nurko, Chief Innovation Officer, Interbrand Group
By Chris Nurko, Chief Innovation Officer, Interbrand Group
The technologies that are propelling us forward as a race are also challenging the very nature of humanity, whether through robotics, Artificial Intelligence, or the rise of the Metaverse in which the line between virtual and reality is blurred. Cloud-based computing, blockchain-enabled transactions and currency, quantum computing and nano-technology are redefining opportunity while also creating new risks.
As new technology is rapidly developed and adopted (driven by new efficiencies and greater efficacy), regulatory rules, laws and standards often lag. It is often up to the tech organizations as ‘actors’ to define the rules as they go along.
Some do so with an ethical compass that is based on purpose, values, and stakeholder considerations. Some do not – blurring the lines between good and bad actors.
Intersecting and integrating technology so deeply within the human experience casts a spotlight on the need for human values, human truths and human priorities that are defined by ethics and values. What’s difficult is that there is no single human value, truth or set of ethics that can provide a one-size-fits-all approach to leadership and decision-making. And, as leaders of organizations seek to implement a code of ethics relating to technology, they will likely encounter multiple aspects and dimensions of push-back. From employees, from consumers, from competitors, from regulators and from citizens. A leadership team must have a reliable and robust means for navigating the world, and for making decisions that yield the benefit and outcome of integrity. The gap between law, policies, ethics and protocols is exacerbated by the evolving expectations of stakeholders and role they see commercial organizations and brands playing in defining the fair and level playing field while offering competitive choice and trustworthy reassurance. This is becoming the new playing field for organizations in which ethics and integrity of leadership, of brands and innovation will emerge as a differentiator and competitive advantage.
Decision-making at a leadership level about what, how and who is ‘connecting’ for what purpose and what outcome will be the topic of leadership accountability in the coming years.”
New technologies such as Ai are programmed by human beings, and as such they reflect the values, assumptions, bias and choices of humans. The algorithms that are defined are inherently biased. As data is obtained via these algorithms too, the interpretation and use of the data is open to interpretation and potential misrepresentation or use. The role of facial recognition, DNA based data and other highly personal information raises questions about the level of intrusiveness and protection of our human and consumer rights. The challenges and risks of privacy, security, protection from misuse or misrepresentation are also challenged by legal issues of ownership. Security of data is one major area of ethical consideration. Veracity of data and content is a second and closely related area of concern. In a social-media connected world, the opportunity for manipulation and misrepresentation of ‘real’ vs. ‘fake’ news is further complicated with the rise of and blurred line between ‘real world’ and ‘virtual world’ experiences. As the metaverse is expanded, the issues of ethics, integrity, protection and security are all present for adjudication. Truly, digital transformation of how we connect consumers and commit resources and value has both the potential for ‘good’ and ‘bad’ implications. Only the integrity and trust of the organizations and brands operating in this new blurred world provide safeguards in the absence of legal rules and policies.
As leaders of organizations seek to benefit from Ai, Blockchain, Quantum computing and cloud-based/edge computing – so too must they consider the impact of data ownership, collection, surveillance and privacy.
Decision-making at a leadership level about what, how and who is ‘connecting’ for what purpose and what outcome will be the topic of leadership accountability in the coming years. The risks and pitfalls that come with the failure to adhere to the four principles mentioned earlier will cast a shadow on brand integrity and stakeholder trust. Leadership of organizations should be well advised to create an ethical framework for decision-making; to engage all audiences in defining and understanding their definition of integrity and how it is connected to the brand’s purpose, values, culture and performance. Organizations will need to re-define permission-based constituency decision-making and put in place a governance structure to consider the impact of innovation and technology for their stakeholders.
The rise of a Chief Ethics & Integrity function would help along with a commitment to stakeholders-as-constituents engagement. By connecting the purpose and culture of an organization to the ethical issues and opportunities raised via technology a leadership team for an organization can make great strides to mitigate brand, legal and commercial risk.
The rise of ethical capital for an organization is directly as a result of an organizations’ ability to recognize how digital transformation provides both opportunity, and risk to be mitigated. The organizations that are leading this emerging field are those that embrace 4 key elements of Ethical Leadership as it applies to digital transformation and innovation. They are:
They embrace a culture of purpose led ambitions, values and a culture in which they have explicitly defined what they stand for and how this relates to their stakeholders as constituents. This defines their future course and the parameters of how they will compete and define their offer. This establishes the priorities for decision-making at a leadership level and the framework by which decisions will be made.
They place a high degree of importance on accountability for decisions, and for the impact of those decisions on their stakeholders. They lead with confidence knowing they have either defined or amplified the protocols, policies and promises to constituents in an explicit manner and hold themselves accountable to metrics that reinforce commitment and progress.
They support their accountability with a high degree of frequent and explicitly communicated decisions related to their policies, protocols, values and performance. The engagement with constituents and stakeholders is direct, honest, reliable and timely. They engage in discussion with constituents and seek to avoid areas of ambiguity and misinterpretation of policies, process or protocols with a clear point of view.
They view engagement of all constituents equally as being mission-critical for success. They use technology to leverage input and shared understanding; they seek diverse viewpoints and representation in decisions and applying decisions to innovation and technology. The respect for constituents and audiences in and through technological innovation shows up in what and how technology manifests itself as part of the organization’s offer, modus operandi and culture for decision-making. Thus, the organization mitigates the risk of bias and exclusion by fostering an open and democratic means for innovating.
These 4 principles of integrity are defined by an organization’s leadership. In a world of technology aimed at connecting people and data, and to do so via innovation that transforms the capabilities and capacity for improved business outcomes these principles are vital for establishing trust and confidence in an organization.
more data breaches occurred in 2021 compared to 2020 (Theft Research Center)
is the average cost of a data breach per incident (IBM)
Repeatedly cited as one of the most ethical companies in tech, Microsoft places emphasis on the ‘ethics-by-design’ process of developing Ai algorithms in the early stages of product and service design. This is to identify potential bias or design defaults that are potentially discriminatory. These principles of responsible design must pass the business performance aspect as well as the human benefit test. When coupled with facial recognition technology, the issues of both accuracy and privacy are raised. This was as a result of Microsoft’s disaster in the early stages of Ai Conversational-recognition when it’s chatbot (T.A.Y. – Thinking About You) was taught to parrot racist tweets and conversation in less than 24 hours after it’s introduction revealing the downsides and limitations of technology that was not pre-screened for human bias and interaction.
Apple has repeatedly cited privacy and data security as being of primary importance in the development of all Apple ecosystem products and interfaces. Apple famously refused to comply with US Government FBI requests to bypass security protection in the iOS operating system to unlock data encryption codes. This is at a time when dark-web and bad actors are repeatedly attempting to hack via cyber terrorism the systems of many institutions holding personal data of consumers. Again, which over the past few years has revealed that many companies have inadequate protection against data leaks or hacks. In 2021 Robinhood, Facebook, T-Mobile and Vokswagen revealed they had suffered data security leaks and breaches involving the personal identity data of their customers.
The business world is not immune to the ‘bad actors’ in tech, nor is technology invincible. The identity Theft Research Center (ITRC) reports that in 2021 there was a 17% increase in the number of data breaches that occurred over 2020. According to IBM, the average cost of a data breach is now over $4m per incident.
In May of 2021 the Colonial Pipeline ransomware attack demonstrated the physical world impact of a data breach when the fuel pipeline operator was attacked which led to fuel shortages and panic buying. Bitmart, SquidGame and Coinbase crypto-currency providers suffered attacks to data security in 2021 that challenged the notion of fintech security and blockchain.
Manipulative algorithims have been the source of concern related to Facebook and Meta as revealed when whistleblower, Frances Haugen shared documents and insider knowledge about how the company repeatedly put profits over people; manipulated data to foster social discord and ‘false’ accounts and ‘fake news’; despite knowing the negative impact on teen girl’s self-esteem continued to leverage and promote on Instagram detrimental body-conscious behaviours through social media contributing to a teen mental health crisis. Combined with a data security lapse and lack of internal processes for security, Facebook was fined $5billion dollars by the FTC for privacy violations. In February 2022, the very first Chief Compliance Officer for Meta was hired giving hope that the organization now recognizes the importance of ethics and integrity to its brand and business model.
As laws and regulations race to catch up with the speed of innovation in technology, the General Data Protection Regulation (GDPR) in the EU and The California Consumer Privacy Act are both lead indicators of the desire for regulation of tech to give consumers control over what/how and how their data is truly treated as ‘theirs’.
For organizations looking for best practice, a few key elements can structurally assist in promoting a credible culture of integrity and trust across technology, legal and financial aspects. This includes a Chief Compliance or Ethics & Integrity Officer with accountability and responsibility; A leadership program related to innovation the places the human experience and user engagement into the R&D process; a system of governance that recognizes the role performance indicators and policy plays in the ethical issues of sustainability, social responsibility and human rights for a brand. When leadership of an organization defines a framework of Purpose, Values, Code of Conduct and Ethics into a management approach towards technology and stakeholder engagement they effectively help to mitigate risk to the business.