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Innovation

Cybersecurity

Corporate Digital Responsibility: the next ethical frontier

1 October 2021 • by Öykü Işık, Michael R. Wade in Innovation

There have been two megatrends that have dominated the last decade: digitization and ethics and sustainability, but so far there have been few points of intersection between these two trends, largely because...

There have been two megatrends that have dominated the last decade: digitization and ethics and sustainability, but so far there have been few points of intersection between these two trends, largely because ethics and sustainability tends to deal with the physical world, and digitization largely deals with the virtual world. But you can think of data in a very similar way to a physical product, and with that there are a number of ethical issues including how it is sourced, transported, sold, packaged and destroyed. This is where corporate digital responsibility (CDR) comes into play.

CDR is a set of practices and behaviors that help an organization use data and digital technologies in a way that is socially, economically, technically and environmentally responsible. Professors Isik and Wade guided participants through how companies can effectively formulate a CDR strategy. They recommend three questions to consider when making decisions on how to manage CDR:

1.       Why are you doing it?

Is your overall approach compliance-driven or is it rooted in your purpose? Like most things there isn’t a black and white answer. We recommend a trust but verify approach. It is always effective to be purpose driven in your mission, but it is best backed up by some degree of regulation. If possible, align incentives with responsible behaviors.

2.       What are you doing?

Are you taking a reactive approach where you are focused on being agile and fast to change with the landscape, but not spending a great deal of time trying to predict the future? Or are you being proactive, looking towards the future and including what you think will become an issue in your plans now? We recommend being as proactive as you can. You should strive to anticipate future trends and build them into your digital pipeline.

“You have to try and anticipate changes that will happen, we will be judged by the ethical norms of the future,” says Wade. “Just being reactive is not going to be enough. But at the same time, you also have to react to unpredictable changes…This means you need to have agile systems and processes for this to work.”

3.       How are you doing it?

This is a question of centralization versus decentralized implementation. Fragmentation is a key problem with CDR, in fact, 53% of participants in the webinar felt their organizations were taking a fragmented approach to CDR so centralization can be a very attractive route to take. Wade and Isik recommend the middle ground here as well. Building a central team that can act as advisors, facilitators and trainers can be very effective but then different units can have freedom to take initiatives further. You can also use an external advisor. Some companies are hiring ethical boards. This can bring a fresh perspective along with external insights and experience.

To assess where you are at, there are several questions you should ask yourself about corporate digital responsibility:

How advanced are you on digitally responsible practices? Have you assessed or benchmarked your organization?

How do you approach governance of CDR? Do you have a Chief ethics officer or an ethics board or council? Cross-functional collaboration within your organization is necessary for the success of these initiatives.

How embedded are digital ethics in the way you do things? Do you have processes in place to evaluate the ethical implication of digital tools or projects?

Are responsible digital practices embedded in your company culture? Are digital issues such as privacy, cybersecurity, and digital diversity linked mostly to compliance, risk mitigation or cost minimization? This links to purpose within a company.

“When people believe in the importance of the ethical implications of data use, things move more smoothly and people contribute more significantly,” says Isik.

This field of ethics is going to continue to grow, and it will be important for companies to take it seriously, not just because of doing the right thing, but also because it will affect the bottom line. There has been a global shift with a significant drop in customer trust specifically towards digital companies. So, these concepts will become progressively more important when it comes to winning customers.

When people believe in the importance of the ethical implications of data use, things move more smoothly and people contribute more significantly,
- Öykü Işık

This field of ethics is going to continue to grow, and it will be important for companies to take it seriously, not just because of doing the right thing, but also because it will affect the bottom line. There has been a global shift with a significant drop in customer trust specifically towards digital companies. So, these concepts will become progressively more important when it comes to winning customers.

Authors

Oyku Isik IMD

Öykü Işık

Professor of Digital Strategy and Cybersecurity at IMD

Öykü is Professor of Digital Strategy and Cybersecurity at IMD. Her research focuses on digital resilience and the ways in which disruptive technologies challenge our society and organizations.

Michael Wade - IMD Professor

Michael R. Wade

Professor of Innovation and Strategy at IMD

Michael holds the Cisco Chair in Digital Business Transformation, he is the Director of the Global Center for Digital Business Transformation. and he is Co-Director of the Leading Digital Business Transformation program. His areas of expertise relate to strategy, innovation, and digital transformation. He obtained Honours BA, MBA and PhD degrees from the Richard Ivey School of Business, University of Western Ontario, Canada. Previously, he was the Academic Director of the Kellogg-Schulich Executive MBA Program. Michael has been nominated for teaching awards in the MBA, International MBA, and Executive MBA programs.

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