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.

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

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.

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

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.

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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.”

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