Neil is CEO of GAN Integrity, a technology company that manages corporate compliance programs for more than 140 global companies.
Now, thanks to globalization, social media, big data, whistleblowers and corporate compliance initiatives, we have more visibility than ever into the organizations and people that affect our lives and our economy.
What we’ve learned from this surge in transparency is that sometimes companies mess up even when they’re not trying to. There’s a distinct difference between companies that deliberately engage in unethical practices and those that get caught up in them due to loose policies, inadequate self-policing or a few bad actors that misrepresent the ethics of the rest of the organization. The primary difference between these two types of companies is how fast they’re able to act -- and if they act at all.
Fortunately, just as technology and data can introduce unprecedented visibility into organizations’ unethical practices, they can also equip organizations with ways of protecting themselves from internal and external risks. As CEO of a compliance management platform, I believe there are three things that must be in place for organizations to stay above board in a rising democracy of ethics.
1. Digitally Driven Self-Policing
Based on what I’m seeing, it’s likely that many of the world’s largest enterprises and organizations will be the last to digitize their core manual systems and processes, including those that expose them to ethics violations and risk.
One particularly pressing item for their digital transformation to-do lists is a means of self-policing internal and external threats. A good place to start is with a centralized system of housing the policies and procedures that dictate everything from dress code and employment to vetting international partners, enforcing anti-corruption training, and the use and protection of consumer data.
Technology enables companies to introduce trackable methods of ensuring employees have reviewed and agree to abide by the policies that keep their companies clear of risk. It can also dynamically update the documentation in far-off corners of the organization as state and federal regulations evolve. (Think employment policies that change regularly, on a state-by-state basis.) Keeping up and complying with these updates manually is not only a full-time job, but it also leaves too much room for error.
For companies that harbor mass amounts of consumer data, there must be precautions in place to protect that data from falling into the wrong hands. When, last year, Facebook was caught sharing user data with Cambridge Analytica, it quickly became clear that its policies for protecting user data from questionable third parties were not adequate or properly enforced. It also revealed a gap in technological safeguards against external threats, such as bots scouring for data breaches and multifactor authentication.
Secure online portals empower whistleblowers -- colleagues, executives, partners, vendors -- to anonymously report activity that falls outside the policies that protect the company, without putting themselves at risk. However, where technology will always fall short is in its ability to force companies to be ethical. Empowering whistleblowers does nothing if there are no policies in place to act on these unethical or high-risk behaviors.
2. Automated Due Diligence
Major enterprises that need on-the-ground partners to navigate local governments, source critical supplies or manage relationships in countries with relatively looser regulations put themselves at risk when they don’t conduct proper background checks on these prospective high-risk third parties.
In our new democracy of ethics, whatever an organization’s partners do on its behalf, upon request or of their own volition, can be documented and syndicated globally within a matter of seconds. Beyond bad publicity or reputational crises, third parties can also expose organizations to legal risk. If a company doesn’t do its due diligence on the third parties conducting business on its behalf, it leaves itself vulnerable to learning about them through citizen reporting on social media and other channels, well before it has a chance to safeguard its reputation.
The good news is that not only have ethics been democratized; so has data. Companies can use technology to run extensive global background checks of all public databases and return comprehensive results on entities, with high degrees of accuracy.
3. Reliable Data Will Soon Predict Risk On Its Own
Currently, technology is able to compile and report mass amounts of data from multiple systems, but it’s not yet able to make recommendations or sound alarms based on it. Companies using centralized systems to house their online whistleblower portals, digital policy enforcement, automated global due diligence and dynamically updated documentation are perhaps unknowingly gathering data that will ultimately fuel the future of intelligent risk management systems.
Based on what I’m seeing in the industry, this technology will evolve with the introduction of algorithms that scour data to identify, detect and analyze patterns -- and the machine learning that understands them. Companies may eventually be able to predict risks or ethics violations before they happen. For instance, if the system detects that every time X shows up in a due diligence search, Y is reported later, the system can surface an alert flagging not only the high-risk behaviors, but also the potential negative outcomes of engaging with the third-party partner under review.
Technology and data provide a look into organizations like never before, and though they can quickly impact the reputation of a company, they also have the ability to protect organizations from internal and external risks. With the right technology and strategy behind them, organizations can remain above the fray in a rising democracy of ethics.